U.S. stock index futures edged higher on Monday as most megacap growth stocks steadied after a selloff in the previous session, while investors awaited quarterly reports from U.S. retail giants and economic data later in the week.
The United States is widely regarded as the world's economic superpower. The health of the U.S. economy and stock market are considered paramount to the ongoing success of developed and emerging markets around the globe.
Microsoft (NASDAQ: MSFT) has been on fire so far in 2023, driven higher by a resurgence in technology stocks amid a broader market rally. Shares of the software and cloud technology specialist have gained 34% so far this year, more than double the gains of the S&P 500, which
Below is Validea's guru fundamental report for MICROSOFT CORP (MSFT). Of the 22 guru strategies we follow, MSFT rates highest using our Patient Investor model based on the published strategy of Warren Buffett. This strategy seeks out firms with long-term, predictable profitabili
The bigger the better? Warren Buffett might seem to think so. He has loaded Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) portfolio with large-cap stocks. Nine of the 50-plus stocks that Berkshire Hathaway owns are mega-caps with market caps of $200 billion or more.
Investors looking for attractive investments amid the ongoing volatility in the stock market and persistent macro challenges could consider certain
blue chip stocks for their portfolios. Blue chip stocks are stocks of large, well-established companies that have a solid financial position and a good track record of thriving despite macro challenges. Using
TipRanks’ Stock Comparison Tool, we placed Home Depot (
NYSE:HD
), Microsoft (
NASDAQ:MSFT
), and Johnson & Johnson (
NYSE:JNJ
) against each other to find the most attractive blue chip stock as per Wall Street analysts.
Home Depot (NYSE:HD)
After enjoying pandemic-induced demand, Home Depot has been under pressure due to a weak housing market. In May, the home improvement company announced mixed fiscal first quarter results, with
earnings exceeding expectations and
revenue falling short of estimates. The company’s top line declined 4.2%, as customers postponed large projects and bought fewer big-ticket items due to macro pressures.
Further, unfavorable weather and declining lumber prices also impacted fiscal first-quarter sales. Following the weak Q1 FY23 performance, the company lowered its full-year sales guidance. It expects sales to fall by 2% to 5%.
Home Depot is
scheduled to announce its Q2 FY23 results on August 15. Analysts expect the company’s sales to decline 3.6% to $42.2 billion. Adjusted EPS is expected to fall about 12% to $4.46.
Is HD a Good Stock to Buy?
Ahead of the Q2 FY23 results,
Telsey Advisory analyst Joseph Feldman downgraded Home Depot and rival Lowe’s (
NYSE:LOW
) to Hold from Buy. The analyst expects the two companies to face a slightly steeper slowdown due to the weak housing market trends, cautious consumer spending, and continued normalization following solid COVID-19 and government stimulus-related gains.
Feldman noted that
HD stock outperformed the S&P 500 from 2019 to 2022, fueled by superior EPS growth. Nonetheless, Feldman feels that the stock might not maintain its outperformance in the near term, with the analyst now expecting EPS to decline 11% before growing 7% in 2024. While Feldman downgraded HD stock, he maintained his price target at $315.
With 15 Buys and 11 Holds,
Home Depot stock scores a Moderate Buy consensus rating. The average price target of $326.17 implies a possible downside of 1.5%.
Shares have risen about 5% year-to-date.
Microsoft (NASDAQ:MSFT)
Microsoft
shares have risen 34% year-to-date, as the company is being viewed as one of the frontrunners of the generative
artificial intelligence (AI) wave. Microsoft’s huge investment in
ChatGPT creator OpenAI, the integration of AI in its tools and applications, and other AI initiatives are expected to drive future growth.
Coming to recent performance, Microsoft’s
second-quarter results surpassed Wall Street’s expectations. However, investors were concerned about the company’s third-quarter guidance that fell short of analysts’ estimates due to weak demand for its products in the PC market.
Is Microsoft a Buy or Sell Now?
Earlier this month,
Tigress Financial analyst Ivan Feinseth raised the price target for MSFT to $433 from $411 and reaffirmed a Buy rating. Feinseth stated that the company is at the forefront of the AI revolution, thanks to the continued integration of increasing AI functionality across all aspects of its business and product lines.
Feinseth thinks that MSFT’s increasing position as a dominant AI service provider will continue to fuel revenue growth and stock price gains.
Microsoft earns Wall Street’s Strong Buy consensus rating based on 32 Buys, two Holds, and one Sell. At $391.52, the average price target implies about 22% upside.
Johnson & Johnson (NYSE:JNJ)
Healthcare giant Johnson & Johnson has been under pressure due to the massive liabilities related to lawsuits alleging that the company’s baby talc powder was contaminated with asbestos and caused cancer. While this matter poses a major risk for the company, it continues to streamline its operations and focus on growth areas.
JNJ recently completed the spin-off of its consumer division into a separate company called Kenvue (
NYSE:KVUE
). The company took this step to direct its resources toward its pharmaceutical and medtech businesses.
Meanwhile, the company reported
better-than-anticipated second-quarter results due to strong sales of its MedTech division. The rebound in non-emergency procedures, which were postponed during the pandemic, drove the MedTech division’s sales in the second quarter. The company raised its full-year sales and EPS guidance to reflect the better-than-expected Q2 2023 results.
Is JNJ a Buy or Sell?
Following the company’s upbeat Q2 2023 results,
Barclays analyst Matt Miksic increased his price target for
JNJ stock to $175 from $171 and maintained a Buy rating. The analyst raised his sales and EPS estimates to reflect the Q2 2023 performance and improved outlook.
Miksic also delayed the projected decline in the revenue of JNJ’s blockbuster immunology drug
Stelara from 2024 to 2025, given the intellectual property settlements announced by the company.
Wall Street’s Moderate Buy consensus rating on Johnson & Johnson is based on four Buys and eight Holds. The average price target of $182 implies about 5% upside.
Shares have declined about 2% since the start of this year. JNJ is a dividend king and offers a
dividend yield of 2.8%.
Conclusion
Wall Street is highly bullish on Microsoft but cautiously optimistic about Home Depot and Johnson & Johnson. Analysts see more upside in Microsoft stock compared to the other stocks due to optimism about the company’s prospects in generative AI.
Disclosure
Ark Invest CEO Cathie Wood looks for one thing in her investments above all others: innovation. It's no coincidence that half of Ark Invest's actively managed ETFs feature the word in their names. There's arguably no greater area for innovation right now than artificial intellige
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Tech stocks were lower late Friday afternoon, with the Technology Select Sector SPDR Fund (XLK) decreasing 0.7% and the Philadelphia Semiconductor index falling 2.4%.
Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Microsoft Corporation (Symbol: MSFT), where a total volume of 388,581 contracts has been traded thus far today, a contract volume which is representative of app
Microsoft stock is underperforming its FAANG rivals, allowing investors to scoop up shares of this well-positioned player in the cloud computing and AI industries as the broader tech sector pulls back from year-to-date highs.
The S&P 500 and Nasdaq dropped on Friday, heading for another weekly decline after hotter-than-expected U.S. producer prices data pushed Treasury yields higher and sank rate-sensitive megacap growth stocks, which weighed on the benchmark indexes.
Tech stocks were lower Friday afternoon, with the Technology Select Sector SPDR Fund (XLK) decreasing 0.7% and the Philadelphia Semiconductor index falling 2.3%.
Artificial Intelligence, commonly referred to as AI, is the game-changing technology behind machines that can think, learn, and make decisions similarly to humans. It’s the force behind innovations like self-driving cars, chatbots, and recommendation systems on our favorite
What happened
Innodata (NASDAQ: INOD) stock is soaring today following the publication of the company's second-quarter earnings results. The data services company's share price was up 22.1% at 11:30 a.m. ET according to data from S&P Global Market Intelligence.