September S&P 500 futures (ESU23) are up +0.01%, and September Nasdaq 100 E-Mini futures (NQU23) are down -0.03% this morning as market participants geared up for more corporate earnings results while also looking ahead to Friday’s nonfarm payrolls report.
U.S. stock index futures were little changed on Monday as investors awaited earnings from more megacap companies and a key employment report later this week.
European shares jumped on Monday after a key economic report
for the region showed a fall in inflation - an optimistic
kick-off for a week littered with major economic data, central
bank meetings and earnings updates.
September S&P 500 futures (ESU23) are up +0.07%, and September Nasdaq 100 E-Mini futures (NQU23) are up +0.03% this morning as market participants geared up for more corporate earnings results while also looking ahead to Friday’s nonfarm payrolls report.
Advanced Micro Devices (
NASDAQ:AMD
) will report Q2 financials after the market closes on Tuesday, August 1. Wall Street analysts are upbeat about AMD stock ahead of the Q2 print. The
chip company is one of the key beneficiaries of the evolution of
AI (Artificial Intelligence). In addition, analysts believe that inventory-led issues will subside in 2H (the second half of 2023),
driving its financials and stock price.
AMD stock has risen over 74% year-to-date, outperforming the broader markets by a wide margin. While analysts remain upbeat, their earnings estimate suggests a significant year-over-year decline. Let’s delve into analysts’ estimates for Q2.
Here’s What Consensus Estimates Reveal
Wall Street analysts expect AMD to post revenues of $5.32 billion in Q2, roughly in line with management’s guidance range and approximately flat year-over-year. However, sales are expected to decline on a year-over-year basis, reflecting weakness across the Client (primarily including CPUs) and Gaming segments.
Further, management expects the Embedded segment (which includes embedded CPUs and GPUs), which registered massive growth in Q1, to see a modest sequential decline.
Given the lower sales projection, analysts expect AMD’s bottom line to register a significant year-over-year decline. Wall Street analysts expect AMD to post
earnings of $0.57 a share in Q2, down from $1.05 in the prior-year quarter. The consensus estimate also compares unfavorably with the previous quarter’s earnings of $0.60 per share.
Though analysts expect the company’s top and bottom lines to decline on a year-over-year basis, the AI opportunity and expected reacceleration in its revenue in 2H keep analysts optimistic about AMD stock.
What is the Future of AMD Stock?
Ahead of the Q2 print,
Rosenblatt Securities analyst Hans Mosesmann reiterated his Buy recommendation on AMD stock on July 26. The analyst sees Q2 as a “transitional quarter” that will lead into 2H, which has “multiple growth drivers,” including the recovery in CPUs and “early ramps in the MI300 GPU compute series,” its GPU for AI.
Along with Mosesmann,
Wolfe Research analyst Chris Caso and
Wells Fargo analyst Aaron Rakers also maintained a bullish outlook on AMD stock ahead of Q2 earnings. Caso initiated coverage of AMD stock with Buy on July 19. Further, Rakers reiterated a Buy recommendation on AMD stock on July 18.
Both analysts see a solid upside in AMD stock due to the MI300X GPU ramp-up.
Overall,
AMD stock has 24 Buy and seven Hold recommendations for a Strong Buy consensus rating. Even though AMD stock has risen quite a lot, analysts’ average price target of $137.38 implies 21.62% upside potential from current levels.
Insights from Options Trading Activity
The
options traders are pricing in a 7.92% move on earnings, which is greater than the previous quarter’s earnings-related move of -9.22% and the average 2.85% move in the last eight quarters.
Disclosure
Asian shares were trying to end the month on a firm note on Monday in a week littered with major economic releases, central bank meetings and earnings updates from mega caps Amazon and Apple, though rising Japanese bond yields posed a risk.
Asian shares looked to end the month on a firm note on Monday in a week littered with major economic releases, central bank meetings and earnings updates from mega caps Amazon and Apple, though rising Japanese bond yields posed a risk.
Asian shares looked to end the month on a firm note on Monday in a week littered with major economic releases, central bank meetings and earnings updates from mega caps Amazon and Apple, though rising Japanese bond yields were a risk.
Friday’s rally in stocks suggests investors are now more optimistic about the direction of the economy and the near-term and long-term impact of monetary policy decisions. Here are the stocks I’ll be watching this week.
Below is Validea's guru fundamental report for ADVANCED MICRO DEVICES, INC. (AMD). Of the 22 guru strategies we follow, AMD rates highest using our Twin Momentum Investor model based on the published strategy of Dashan Huang. This momentum model looks for a combination of fundam
Today, I'm sharing the top stocks in my $1.5 million growth stock portfolio. I believe we are in a new industrial revolution that could supercharge your long-term investing portfolio. Megatrends, such as artificial intelligence (AI), autonomous driving, robotics, and the Internet
Everybody knows Nvidia (NASDAQ: NVDA) is a leading provider of chips specially designed for artificial intelligence (AI) systems. And everybody knows Nvidia's chief rival across the computing sector is Advanced Micro Devices (NASDAQ: AMD). AMD inspires far fewer AI headlines than
(RTTNews) - AMD (AMD) said that it plans to invest about $400 million over the next five years to expand research, development and engineering operations in India.
Shares of Intel INTC spiked +6% today following the world’s largest semiconductor company’s stronger-than-expected second-quarter results on Thursday evening.
After a rocky 2022, the
crypto market bounced back in a big way in 2023. Bitcoin (
BTC-USD
), by far the largest digital asset by market cap, is up 75% year-to-date, while Ethereum (
ETH-USD
), the second-largest, is up more than 50% over the same time frame. The crypto-focused
VanEck Digital Transformation ETF (
NASDAQ:DAPP)
has taken advantage of this resurgent crypto interest to gain nearly 200% year-to-date.
While DAPP’s 2023 performance has been stellar, there are several pros and cons that investors should be aware of before making an investment decision on DAPP.
What Does the DAPP ETF Do?
DAPP is a crypto-focused ETF from ETF and mutual fund provider VanEck. It seeks to track the results of its underlying index, the MVIS Global Digital Assets Equity Index, which intends to “track the performance of companies that are participating in the digital assets economies," according to VanEck. Its ticker alludes to decentralized applications or "dApps," the user-facing smart contracts that exist on blockchains like Ethereum.
DAPP launched in April of 2021, and it is still relatively small in the bigger investing picture, with about $64 million in assets under management (AUM).
DAPP's Holdings
DAPP features a fairly limited scope of holdings. It holds just 20 stocks, and its top 10 holdings make up 63.1% of the fund's assets. Below, you’ll find an overview of
DAPP’s top holdings using TipRanks’ holdings tool.
Aside from holding just 20 stocks, DAPP also lacks diversification in that outside of top holding Coinbase Global (
NASDAQ:COIN
) and top 10 positions in MicroStrategy (
NASDAQ:MSTR
) and Block (
NYSE:SQ
), the fund is pretty much dominated by Bitcoin miners and companies that make Bitcoin mining equipment. This includes companies like Terawulf (
NASDAQ:WULF
), Riot Platforms (
NASDAQ:RIOT
), Marathon Digital (
NASDAQ:MARA
), and Canaan (
NASDAQ:CAN
).
This isn’t a bad thing in and of itself, but for an ETF touting the digital transformation of the economy, it seems like a missed opportunity to invest in some of the many other interesting names that are involved in different aspects of the crypto industry. Plus, owning a dozen different miners doesn't do much for DAPP's diversification, as these stocks all more or less move based on the ups and downs of the price of Bitcoin.
Stocks that would have been interesting to include in a digital transformation ETF are semiconductor companies like Nvidia (
NASDAQ:NVDA
) and Advanced Micro Devices (
NASDAQ:AMD
) that provide the graphics processing units (GPUs) used by Bitcoin miners. Other interesting stocks would be dominant payment networks like Visa (
NYSE:V
) and Mastercard (
NYSE:MA
), which have invested time and resources in the crypto space and are adopting blockchain technology.
How about CME Group (
NASDAQ:CME
), the parent company of the CME exchange, which, in addition to commodities in the energy and agricultural markets, provides futures and options trading for Bitcoin and Ethereum?
Shopify (
NYSE:SHOP
) would have been a solid inclusion as well, as the e-commerce leader has forayed into crypto in a variety of ways and is making it a bigger part of its strategy. Or, if the fund wanted to get even more creative and approach it from a different angle, it could even include something like Starbucks (
NASDAQ:SBUX
), which has incorporated NFTs into its popular loyalty program (with promising results).
As is, DAPP's holdings are a mixed bag when it comes to their Smart Scores, as six of its top 10 positions feature a Smart Score of 8 or higher, while the rest feature neutral scores. The
Smart Score is a proprietary quantitative stock scoring system created by TipRanks. It gives stocks a score from 1 to 10 based on eight market key factors. A score of 8 or above is equivalent to an Outperform rating.
DAPP itself has a neutral ETF Smart Score of 7.
Is Its Expense Ratio High?
DAPP’s expense ratio of 0.50% is somewhat middle-of-the-road. On the one hand, it is considerably higher than most ETFs that I would typically consider investing in. On the other hand, it should be noted that it isn’t as expensive as many of the other ETFs in the crypto space, where jarringly-high fees seem to be par for the course.
DAPP’s expense ratio is equal to that of the
Global X Blockchain ETF (
NASDAQ:BKCH)
, but it is considerably lower than that of the
Bitwise Crypto Industry Innovators ETF (
NYSEARCA:BITQ)
, which has a sky-high expense ratio of 0.85%, and the
Amplify Transformational Data Sharing ETF (
NYSEARCA:BLOK)
, which also has a much higher expense ratio of 0.75%.
DAPP’s expense ratio of 0.50% means that an investor allocating $10,000 into DAPP will pay $50 in fees over the course of the year. Assuming the expense ratio remains consistent over time and that the ETF returns 5% per year going forward, this DAPP investor would pay $160 in fees over a three-year time frame and $280 in fees over a five-year time frame. Over the course of 10 years, the investor would pay $628 in fees.
Is DAPP Stock a Buy, According to Analysts?
Turning to Wall Street, DAPP has a Moderate Buy consensus rating, as 75.41% of analyst ratings are Buys, 14.75% are Holds, and 9.84% are Sells. At $9.63, the
average DAPP stock price target implies 15.6% upside potential.
Investor Takeaway
DAPP has been a strong performer year-to-date, and it deserves credit for that. On the downside, it isn’t particularly diversified, and I feel that it missed the opportunity to look beyond the usual suspects for like Coinbase and miners to add some compelling investments to the fund that are participating in the "digital transformation" in different ways.
Furthermore, its expense ratio isn’t great, but in fairness, it is lower than that of many of its competitors in the crypto space. Additionally, DAPP’s relatively small size could make it susceptible to market volatility.
Lastly, while DAPP has been a strong performer in 2023, it has actually lost about 50% since its inception in 2021. For these reasons, I can’t really call DAPP a compelling investment opportunity at this time.
Disclosure
U.S. President Joe Biden is planning to sign an executive order to limit critical U.S. technology investments in China by mid-August, Bloomberg news reported on Friday, citing people familiar with the internal deliberations.