ServiceNow NOW is riding on strong fundamentals, driven by a robust portfolio and an expanding clientele.NOW’s prospects are also benefiting from the bullish U.S. equity market trends, backed by the decline in energy prices, moder
In this video, I will talk about Nvidia (NASDAQ: NVDA), which is up a whopping 188% this year alone. Now that it has joined the trillion-dollar club, I will talk about whether it might be time to sell Nvidia stock and what two analysts are saying.
Investors in leading cloud and semiconductor stocks have probably seen big gains this year, as the artificial-intelligence (AI) revolution sparked by the introduction of ChatGPT last November began translating into blockbuster revenue and profit gains for well-positioned companie
How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Count actively managed environmental, social, and governance (ESG) fund managers among the professional investors that are looking to boost exposure to the scorching hot artificial intelligence (AI) theme. It’s a sensible move not only because many AI and AI-adjacent stocks are soaring, but also because many of these companies had strong ESG credentials prior to [...]
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For Immediate ReleaseChicago, IL – June 26, 2022 – Today, Zacks Investment Ideas feature highlights Enphase Energy, Inc. ENPH, Public Storage PSA, Tesla TSLA and Nvidia NVDA.
The rapid adoption of generative artificial intelligence has boosted markets this year, but after the initial euphoria, investors are waking up to the possible risks, including the need to be highly selective in stock-picking.
Intel stock (NASDAQ:INTC) currently trades at $33 per share, about 52% below the levels seen on April 9, 2021 (pre-inflation shock high). Intel saw its stock trading at around $37 at the end of June 2022, just before the Fed started increasing rates, and has lost about 12% since.
Nvidia's (NASDAQ: NVDA) stock has nearly tripled since the beginning of 2023 and is currently hovering near its all-time high. The chipmaker's stock caught fire as the explosive growth of the artificial intelligence (AI) market -- driven by the rise of "generative AI" platforms l
Below is Validea's guru fundamental report for NVIDIA CORP (NVDA). Of the 22 guru strategies we follow, NVDA rates highest using our Quantitative Momentum Investor model based on the published strategy of Wesley Gray. This momentum model looks for stocks with strong and consiste
Buying and holding shares of growing companies can lead to wealth-building returns. Stocks can be very unpredictable in the short term, but investors can outsmart Wall Street by patiently holding fast-growing companies that have advantages over the competition.
The past several years have been a whirlwind for investors. After soaring to new heights in 2021, the major market indexes did an abrupt about-face, plunging into the worst bull market in more than a decade. But after spending more than a year in the dumps, stocks have come roari
As artificial intelligence (AI) investing picks up steam, the trend is beginning to look more and more like other bubbles that have burst. It's common to hear: "This time, it's different!" The reality is that history doesn't often repeat itself, but it does rhyme.
Many people would associate artificial intelligence (AI) with chatbots like ChatGPT or even Bard, which was released more recently by Alphabet's Google. It makes sense because the software is consumer-facing. But those platforms wouldn't exist without the advanced semiconductor h
What a difference a few months makes. After being beaten down for much of last year, Nvidia (NASDAQ: NVDA) stock has come roaring back, with shares up 200% (as of this writing) thus far in 2023, more than 13 times the gains of the S&P 500. This is also in stark contrast to it
Is a new bull market here for the S&P 500? It depends on whom you ask. Yes, the index has jumped more than 20% above its previous bear market low. That's enough to qualify as a new bull market for many investors. Others, however, require that the S&P also hit a new all-ti
In today’s stock market, the three largest ETFs by assets under management are all S&P 500 (
SPX
) ETFs. The massive
SPDR S&P 500 ETF Trust (
NYSEARCA:SPY
) comes in first at nearly $410 billion.
The iShares Core S&P 500 ETF (
NYSEARCA:IVV)
comes in second with over $328 billion in assets under management, while the
Vanguard S&P 500 ETF (
NYSEARCA:VOO
) is close behind in third place with $313 billion in AUM. Combined, these three S&P 500 giants have over $1 trillion in assets under management between them.
Why are S&P 500 ETFs Appealing to Investors?
Why invest in the S&P 500? While it may not sound like the most exciting or exotic investing strategy, it is an effective one. While past performance is no guarantee of future results, the S&P 500 index itself has been a pretty good performer for a really long time. Going back to 1957, when the S&P 500 as we know it was made, the index has posted an average annualized return of 10.15%.
Harnessing the Power of the U.S.'s Top Companies
Adding to this appeal, an investment in an S&P 500 ETF gives investors exposure to over 500 of the strongest companies in the United States. An investment in an S&P 500 ETF also gives you instant diversification across sectors and industries.
SPY, the world’s largest ETF, holds 503 stocks, and its top 10 holdings account for 30.3% of the fund. Below, you can take a look at
SPY’s top 10 holdings.
Because the S&P 500 is the underlying index for all of these funds, differences between their portfolios are negligible. Also, because mega-cap tech stocks have come to dominate today's market as the largest stocks in the S&P 500, all three of these ETFs give investors significant exposure to these tech leaders, including Apple (
NASDAQ:AAPL
), Microsoft (
NASDAQ:MSFT
), Amazon (
NASDAQ:AMZN
), Nvidia (
NASDAQ:NVDA
), Tesla (
NASDAQ:TSLA
), Alphabet (
NASDAQ:GOOG
) (
NASDAQ:GOOGL
) and Meta Platforms (
NASDAQ:META
).
IVV holds 502 stocks, and its top 10 holdings also make up 30.3% of its holdings. Take a look at
IVV’s top 10 holdings below.
Lastly, VOO is unsurprisingly similar, with 504 holdings, and its
top 10 holdings make up 30.4% of the fund.
As you can see, the funds are largely the same, although there are some minor differences based on when the funds rebalance.
Dividends
SPY, IVV, and VOO all pay dividends, and they currently all yield roughly 1.5%. Because of the S&P 500's strong performance in 2023 (it's up about 14% year-to-date), this yield is a bit low for dividend investors to get excited about, but holders will not be complaining.
Long-Term Performance of S&P 500 ETFs
Unsurprisingly, because these funds all invest in the S&P 500, there is a high degree of correlation in their long-term performances. However, most importantly, all three have delivered strong long-term returns for investors.
As of the end of May, SPY had a three-year annualized total return of 12.8%, a five-year annualized total return of 10.9%, and a 10-year annualized total return of 11.9%. Meanwhile, IVV provided annualized total returns of 12.9% over three years, 11% over five years, and 12% over the last 10 years. Lastly, VOO posted annualized total returns of 12.8%, 11%, and 11.9% over the same time frames, respectively, so all three funds provided investors with very similar double-digit annualized returns over the course of the past decade.
Expense Ratios
One area where there is some difference is when it comes to the fees they charge. IVV and VOO
both have expense ratios of just 0.03%. Meanwhile, SPY comes in at 0.09%.
While 0.09% is a fantastic expense ratio in the overall ETF landscape, it is quite a bit higher than that of IVV and VOO in this comparison. Investors in SPY are paying three times as much in fees as investors in IVV and VOO.
See below for
a comparison of SPY, IVV, and VOO based on their fees as well as other criteria using TipRanks' ETF Comparison Tool, which lets you compare up to 20 ETFs at a time based on a variety of customizable factors.
Hard to Go Wrong
Investing in the S&P 500 has historically delivered strong results for investors for a long time, and investing in an S&P 500 ETF allows you to add the power and future growth of 500+ of the U.S.’s top companies to your portfolio with one investment vehicle.
As you can see in the comparison above, SPY, IVV, and VOO all feature identical ETF Smart Scores of 8. The
Smart Score is TipRanks’ proprietary quantitative stock scoring system. It gives stocks a score from 1 to 10 based on eight market key factors. The score is data-driven and does not involve any human intervention. A Smart Score of 8 or above is equivalent to an Outperform rating.
It's hard to go wrong with any of these ETFs, and picking between the three is a good problem to have. All three look like great choices for investors. Also, for investors just starting out, these ETFs are nice for instantly diversifying portfolios.
With similar portfolios and long-term track records over the past decade, the key difference between these ETFs is their fees. While all have favorable expense ratios, SPY’s comes in three times higher than that of IVV and VOO, making those the best buys.
SPY has the longest track record (it launched in 1993, long predating IVV and VOO, which launched in 2000 and 2010, respectively), the most assets under management, and incredible liquidity (it accounts for 20% of ETF trading volume on a daily basis), so there’s certainly nothing wrong with choosing it over its counterparts. Nonetheless, the fees will be a bit higher over time.
Disclosure
Shares of creativity software company Adobe (
NASDAQ:ADBE
) have finally had a chance to ride on the AI wave, with
ADBE stock now up an impressive 44% year-to-date. Undoubtedly, the rise of
AI can either be a good thing or a bad one for Adobe. At this juncture, it's evident that Adobe has taken AI seriously.
The company has been working hard on incorporating AI features well before ChatGPT had its moment in the back half of last year. Adobe's impressive AI tech has won the heart of Wall Street. That said, it's still worth noting that there are competitors, and whether such competitors (think OpenAI) can erode Adobe's time-tested moat surrounding creativity tools remains to be seen.
At this juncture, Adobe has more than enough AI talent to defend itself from rivals. If it can keep up in the AI race, it may be in a spot to claw some share away from some up-and-coming rival platforms. Adobe is a solid AI stock, just like the ones that led the charge in the first half. As such, I am bullish on ADBE stock.
Adobe's Firefly AI Helps Lift ADBE Stock
Firefly (Adobe's AI art generator) is an impressive platform, but it's far from perfect, with a slew of AI art generators out there that may do a better job of giving prompters what they want. Though Adobe Firefly may be "commercially safe," it needs to continue to invest heavily in AI capabilities because it's likely just a matter of time before every AI pure-play joins forces with a licensed digital asset (think image and video) provider. And once that happens, there are bound to be many so-called "commercially safe" art-generating tools.
Adobe's ambitious generative AI roadmap has also injected a wave of enthusiasm into the stock. As its tech advances, Adobe has one way of differentiating itself from AI peers: embedding AI tech alongside its existing platforms. Some folks may be content with getting a number of AI-generated results from a simple prompt. Others may require a greater deal of specificity.
In that regard, Illustrator or Photoshop with Firefly AI may be a match made in heaven. With such AI-enhanced tools, creators can change the finest details in a given work.
Just because AI art generation is improving doesn't mean human-assisted work will become obsolete. As Adobe continues fine-tuning its AI, I believe it can make all its advanced platforms more user-friendly and capable than ever before.
Adobe's Second-Quarter Beat and Raise May be Just the Start
Adobe's surprising quarterly beat sent shares surging. With analysts revising to the upside over Firefly's monetization potential, we could see Adobe have its very own "Nvidia (
NASDAQ:NVDA
) moment" as consumer demand outweighs original, likely overly-conservative estimates.
Indeed, it's prudent to set conservative targets when dealing with the monetization of any new technology. However, I do think management is on the right side of innovation and could continue to serve up more beats and perhaps more guidance raises!
For the second quarter, Adobe sees adjusted EPS in the $15.65 to $15.75 range, up from $15.30 to $15.60 previously. ARR (average recurring revenue) from the digital media division is expected to be $1.75 billion for the year.
Indeed, analysts, management, and investors are upbeat on Adobe stock right now. At around 32.15 times forward price-to-earnings, Adobe isn't all that expensive for an AI play. Shares are much cheaper than some of its AI-savvy big-tech rivals. As we gain a glimpse of the magnitude of the early AI monetization opportunities, I'd not want to bet against Adobe here. Its latest quarterly beat may be just the start.
Is ADBE Stock a Buy, According to Analysts?
Turning to Wall Street, ADBE stock comes in as a Moderate Buy. Out of 29 analyst ratings, there are 17 Buys and 11 Holds, and one Sell rating. The
average Adobe stock price target is $542.94, implying upside potential of 12%. Analyst price targets range from a low of $400.00 per share to a high of $600.00 per share.
The Bottom Line on Adobe Shares and the AI Momentum
Investors are starting to discover how truly capable Adobe is regarding AI. Still, more AI upside could be in the cards as the company continues to use AI tools to change the way we think about digital content creation.
Disclosure
TipRanks
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