Music streaming platform Spotify Technology is planning to roll out a more premium subscription option that is expected to include high-fidelity audio, Bloomberg News reported on Tuesday, citing people familiar with the matter.
There is no better time to invest than now, as the saying goes. Starting as soon as you can ensures that you not only compound your wealth over time, but also start accumulating a dividend stream that will provide you with useful passive income. Rather than segregate investors in
U.S. stocks ended lower on Friday on a week that saw the Fed putting a halt to interest rate hikes and fresh data that showed easing inflation. All three major indexes ended in negative territory. Friday’s decline, however, didn’t
U.S. stocks ended lower on Friday on a week that saw the Fed putting a halt to interest rate hikes and fresh data that showed easing inflation. All three major indexes ended in negative territory. Friday’s decline, however, didn’t
Below is Validea's guru fundamental report for APPLE INC (AAPL). Of the 22 guru strategies we follow, AAPL rates highest using our Twin Momentum Investor model based on the published strategy of Dashan Huang. This momentum model looks for a combination of fundamental momentum an
Online payments pioneer PayPal (NASDAQ: PYPL) has seen significant growth over the last decade, but you wouldn't know it simply by looking at the stock price. Investors who purchased shares when eBay (NASDAQ: EBAY) spun off PayPal back in 2015 have received a 73% return compared
Apple (NASDAQ: AAPL) has featured in countless headlines this month after hosting its Worldwide Developers Conference, where it unveiled its first virtual/augmented reality (VR/AR) headset called the Vision Pro, a 15-inch MacBook Air, an upgraded Mac Studio, a new Mac Pro, and se
The companies behind the Telegram and Viber messaging apps were fined by a Moscow court on Tuesday for failing to delete what Russia deems illegal content, Interfax news agency said, including about the war in Ukraine.
Taiwan's export orders fell for the ninth consecutive month in May, but fared better than expected as demand was seen picking up on the back of interest in artificial technology and other high performance computing products.
Alphabet Inc's Google has begun early conversations with domestic suppliers to move some production of its Pixel smartphone to India, Bloomberg News reported on Tuesday, citing people familiar with the matter.
Several
technology stocks have rebounded from last year’s slump and rallied significantly so far in 2023, thanks to the buzz around
artificial intelligence (AI) and improved investor sentiment about the times ahead. Using
TipRanks’ Stock Comparison Tool, we placed Meta Platforms (
NASDAQ:META
), CrowdStrike (
NASDAQ:CRWD
), and Nvidia (
NASDAQ:NVDA
) against each other to pick the tech stock that could deliver the most attractive upside from current levels.
Meta Platforms (NASDAQ:META)
Shares of
social media giant Meta Platforms have
jumped about 134% since the start of this year. The company’s cost reduction efforts in 2023 (which it calls the “year of efficiency”) and its
return to revenue growth in the first quarter after three quarters of decline revived investors’ confidence in the stock.
In particular, investors appreciated
Meta’s Q1 revenue growth, despite the impact of continued macro pressures on the digital advertising market and the lingering effect of Apple’s (
NASDAQ:AAPL
) iOS privacy policy changes on the company’s ad-targeting capabilities.
Meta is leveraging AI to make ads on its platform more appealing to businesses by making it easier for them to find the right audience. For instance, it is using AI to power automation for advertisers through products like Advantage+ shopping. During the
Q1 earnings call, management revealed that daily revenue from Advantage+ shopping campaigns has risen seven times over the last six months. Further, AI has helped boost Reels monetization efficiency by over 30% on Instagram and more than 40% on Facebook quarter-over-quarter.
Is Meta a Good Stock to Buy?
Last week,
Piper Sandler analyst Thomas Champion increased his price target for
Meta Platforms stock to $310 from $270 and reaffirmed a Buy rating. Champion highlighted that the company has just begun to regain its market share after about two years of declines.
The analyst believes that Meta’s AI investments, growth in new products like Reels, the crackdown on TikTok, and investments in adtech could drive the stock higher in the second half of this year and into 2024.
With 37 Buys and five Holds, Meta earns Wall Street’s Strong Buy consensus rating. The average price target of $290.87 implies 3.5% upside.
CrowdStrike (NASDAQ:CRWD)
Cybersecurity company CrowdStrike recently reported
better-than-anticipated fiscal first-quarter (ended April 30) results, with
revenue rising 42% year-over-year to about $693 million.
Adjusted EPS jumped 84% to $0.57, driven by higher gross margin and cost discipline.
Despite upbeat Q1 FY24 results and improved full-year outlook, investors were disappointed with the continued slowdown in the company’s top-line growth rate. CrowdStrike expects Q2 FY24 revenue growth in the range of 34% to 36%, reflecting further deceleration amid a tough macro backdrop.
Nevertheless, the company is confident about the road ahead based on the growing adoption of its offerings. At the end of Q1 FY24, CrowdStrike’s module adoption rates were 62%, 40%, and 23% for five or more, six or more, and seven or more modules, respectively, as of Q1 end.
CrowdStrike sees more demand for its products driven by the increasing adoption of generative AI. The company has collaborated with Amazon’s (
NASDAQ:AMZN
) Amazon Web Services (AWS) to develop powerful new generative AI applications that help customers accelerate their cloud, security, and AI ambitions.
Is CrowdStrike a Buy, Sell, or Hold?
Mizuho analyst Gregg Moskowitz increased the
price target for CrowdStrike stock to $180 from $175 and reiterated a Buy rating following his firm’s annual cybersecurity summit. Moskowitz noted that despite the ongoing macroeconomic pressures, the company stated that demand remains resilient and its pipeline growth is reflecting good momentum. Further, management is confident about emerging as a generative AI winner.
Wall Street’s Strong Buy consensus rating on CRWD is based on 30 Buys and two Holds. The average price target of $176.77 implies 14% upside.
Shares have risen over 47% since the start of 2023.
Nvidia (NASDAQ:NVDA)
Chip giant Nvidia’s
market-beating fiscal first-quarter results and a stellar Q2 FY24 revenue guidance of $11 billion (plus or minus 2%), which was over 50% higher than the Street’s expectations, triggered a solid rally in the stock.
Shares have rallied more than 192% year-to-date.
The company’s guidance is backed by an
impressive demand for its chips in generative AI applications. The demand for Nvidia’s graphics processing units (GPUs) in cloud computing and generative AI applications like OpenAI’s ChatGPT is fueling strong growth in its data center segment, with revenue rising 14% to $4.28 billion in Q1 FY24.
While the company’s automotive business contributed only $296 million to Nvidia’s Q1 FY24 top line, its impressive growth trajectory (114% in Q1) cannot be ignored. The company’s automotive design win pipeline over the next six years has climbed to $14 billion from $11 billion a year ago.
What is the Target Price for NVDA?
Last week,
Morgan Stanley analyst Joseph Moore raised his price target for Nvidia to $500 from $450, while also increasing the price targets for other semiconductor stocks, including Advanced Micro Devices (
NASDAQ:AMD
).
Moore chose Nvidia as his “top pick” over AMD, as he sees significant upside in the stock over the near team based on his expectation that it could be the “only company” likely to beat and raise this year due to its robust AI exposure. The analyst raised AMD’s price target by $41 to $138, but thinks that “Unlike Nvidia, the company is unlikely to post near term upside.”
Moore expects Nvidia’s data center business to drive much of its growth over the next five years due to demand for the segment’s products, with the spike in interest in generative AI creating a solid environment for AI and machine learning hardware solutions.
Nvidia stock, which recently joined the trillion-dollar market-cap club, boasts Wall Street’s Strong Buy consensus rating based on 32 Buys and four Holds. The average price target of $451.48 implies about 6% upside.
Conclusion
Nvidia and Meta shares have skyrocketed year-to-date and have outperformed CrowdStrike stock. While Wall Street is very bullish about the prospects of all the three tech stocks discussed here, currently, analysts see higher upside in CrowdStrike than the other two stocks.
As per TipRanks’ Smart Score System, CrowdStrike earns a score of “Perfect 10,” implying the stock is capable of outperforming the broader market over the long term.
Disclosure
Entering 2023, investors had concerns over a beaten-down tech sector, geopolitical risks like the war in Ukraine, the debt ceiling limit, higher inflation, rising interest rates, a regional banking crisis, and a pending recession.
ETFs focused on high-quality stocks have grown in popularity in recent years. Fund giant Vanguard, whose
Vanguard S&P 500 ETF (
NYSEARCA:VOO)
is the third-largest ETF in the world by market cap, launched its own
Vanguard U.S. Quality Factor ETF (
NYSEARCA:VFQY)
in 2018. However, is its quality-focused offering better than its flagship, $317.8 billion ETF that simply invests in the S&P 500 (
SPX
)? Let’s compare and find out.
Strategies of Each ETF
VOO’s strategy is straightforward. It simply invests in the stocks in the S&P 500, with no extra bells or whistles attached.
VFQY’s strategy adds a bit more complexity, incorporating a quality factor into its investments. Essentially, this means that VFQY’s managers are looking for stocks with strong fundamentals, namely strong profitability and balance sheets.
Diversified Portfolios
VFQY is incredibly diversified. It holds 458 positions, and its top 10 holdings make up a mere 14.5% of the fund, so investors don’t need to worry about having too much exposure to one stock or a handful of stocks. Below is an overview of
VFQY’s top 10 holdings, created using TipRank’s holdings tool.
Because it invests in the entire S&P 500, VOO is also extremely diversified. It sports 505 holdings, and its top 10 make up 30.4% of assets.
VOO’s top 10 holdings are listed below.
Qualitatively, one difference you’ll notice between VFQY and VOO’s holdings is that because VOO just invests in the S&P 500 without any additional screens or factors, VOO skews more towards the big tech stocks that occupy the top of the S&P 500 more heavily.
Because VOO is market-weighted, these holdings make up larger positions within the fund than they do in VFQY. For example, top Apple (
NASDAQ:AAPL
) is the top holding for both funds, but it has a 7.5% weighting in VOO and just a 1.7% weighting in VFQY.
Based on these weightings, one could say that VFQY is more diversified than VOO, even though overall, both of these funds offer ample diversification.
VFQY has an ETF Smart Score of 7 out of 10 versus an ETF Smart Score of 8 out of 10 for VOO. 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.
Five of VFQY’s top 10 holdings feature Smart Scores of 8 or better, while seven of VOO’s score 8 or better.
Are VFQY and VOO Buys, According to Analysts?
Turning to Wall Street, VFQY has a Moderate Buy consensus rating, as 56.85% of analyst ratings are Buys, 37.16% are Holds, and 6% are Sells. At $125.58, the
average VFQY stock price target implies 11.1% upside potential.
Meanwhile, VOO also has a Moderate Buy consensus rating based on 59.46% of ratings being Buys, 35.12% being Holds, and just 5.42% of ratings coming in as Sells in the last three months. At $444.04, the
average VOO stock price target implies 9.6% upside potential.
Long-Term Track Records -- VOO Takes the Win
VFQY has delivered admirable returns for its investors since its launch. As of the end of May, the quality-focused ETF had a three-year total annualized return of 12.5%, which is nothing to sneeze at. It also had a five-year total annualized return of 7%.
However, these results were bested by its fund-mate, VOO. Over a three-year time frame, VOO edged out VFQY with a total return of 12.8%. However, when we look out over a longer time frame, that’s when the rubber really starts to meet the road. VOO’s five-year annualized return of 11% is four full percentage points better than VFQY’s per year, giving VOO an inarguable edge in this comparison.
Comparison of Fees -- VOO Wins Again
Vanguard is often praised for its low-fee investment products, and these two funds fit that bill. VFQY features a reasonable enough expense ratio of 0.13%, but VOO has a clear edge here as well, with a rock-bottom 0.03% expense ratio.
Assuming that the expense ratio remains the same and that the ETF returns 5% annually, an investor putting $10,000 into VFQY would pay $13 in expenses in year one, $42 over three years, $73 over five years, and $166 over 10 years.
Meanwhile, under the same parameters, an investor allocating the same amount towards VOO would pay just $3 in year one, $10 over three years, $17 over five years, and $39 over the course of the decade, offering substantial savings against its counterpart.
Below, you can check out
a comparison of VFQY and VOO using TipRanks' ETF Comparison Tool, which is customizable and allows users to compare up to 20 ETFs at once across a variety of factors.
Investor Takeaway
VFQY is a good ETF with a strong portfolio of holdings, a solid performance track record, and reasonable fees. However, it is outshined by its own Vanguard counterpart, VOO, which has a less complex strategy but a similarly strong portfolio, an even better track record, and even lower fees.
It may sound surprising that a fund that just invests in the S&P 500 outperforms one specifically focused on high-quality stocks, but keep in mind that the S&P 500 index itself is actually already a pretty good barometer for quality.
The S&P 500 accounts for most of the total value of all stocks listed on U.S. exchanges. These stocks must be profitable, have their primary listing in the United States, trade on the NYSE or NASDAQ, have a market cap of over $12.7 billion or more, and meet certain float and liquidity requirements.
It takes years of strong performance to attain this type of market cap and to be included in this index, so being in the S&P 500 already makes it more likely that a stock is of "high quality." For the reasons discussed above, while VFQY is a solid investment choice, it’s hard to see a compelling reason to choose it over the even better VOO.
Disclosure
Few folks would have predicted that Meta Platforms (
NASDAQ:META
) stock would recover as quickly as it did in the past several months. Though shares have
more than tripled off last year's low, there are still analysts out there who see more in the way of upside for Meta Platforms stock. Despite being the hottest “FAANG” member of late, Meta stock isn't exactly trading above and beyond its peers.
Indeed, the going price for a
FAANG stock seems to be north of 30 times trailing price-to-earnings these days. With that in mind, Meta stock's 34.9 times trailing price-to-earnings (P/E) multiple doesn't seem too stretched, even though it's considerably higher than its five-year historical average of 24.2.
In any case, CEO
Mark Zuckerberg is a man on a mission, with incredible technological tools he can use to improve the existing social-media business while simultaneously breaking into new markets. Undoubtedly, the market is confident in Zuckerberg's ability to play offense and defense in this new, high-interest-rate era for tech. I've been bullish on Meta stock for over a year now and see no reason to temper my bullishness.
Meta Platforms: Few Firms Can Monetize New Tech Better
Macro-induced ad worries are now a thing of the past. The company's social-media business continues to be a cash cow, and with new AI innovations factored in, Meta has found a way to adapt in these harsh times, thanks to Zuckerberg's willingness to experiment with cutting-edge new technologies.
Undoubtedly, Meta has always been a tech-first company, and it'll likely continue to be as new technologies (think the
Metaverse and
AI) move into the mainstream. Though Meta's slow start into the Metaverse has been a concern for some, I continue to believe in Zuckerberg's unique ability to monetize new innovations.
Any firm can innovate, but it takes a remarkable tech company to innovate and monetize effectively. Though Meta may have been caught in a moral gray area a few years ago with the Cambridge Analytica scandal, I do believe the company is well on its way to improving its reputation.
As Meta explores monetization possibilities in the Metaverse, I'd not be so shocked if VR and AR-based ads become the next big growth driver at some point over the next decade. With Apple (
NASDAQ:AAPL
) launching Vision Pro, the moment for the Metaverse may just be a few years away. In any case, Meta is ready, and it will likely be prepared to level up its ad business.
Meta's Project 92 Could Give Twitter a Run for Its Money
Over the nearer term, Meta has some lower-hanging fruit to pick. The company plans to launch a new social-media network to go up against Twitter. Undoubtedly, a Twitter-like platform (named Project 92) seems to be one of the last missing pieces to make its social business complete.
Elon Musk's Twitter purchase has already lost him a great deal (to the magnitude of billions). As Meta kicks off its competing product, with the network of Facebook and Instagram riding behind it, Musk may be in for a bad case of buyer's remorse. Only time will tell how Meta's Twitter rival fares against the actual Twitter. Given the backlash from certain Twitter users following Musk's acquisition, I do view Meta's decision to enter the space as opportunistic.
Musk will not back down without a fight. However, as brilliant of an innovator as he is, I'd not bet against Meta's Twitter rival (Project 92), as some users look to switch to a "sanely-run" alternative.
Is META Stock a Buy, According to Analysts?
Turning to Wall Street, META stock comes in as a Strong Buy. Out of 42 analyst ratings, there are 37 Buys and five Hold recommendations.
The
average Meta stock price target is $289.68, implying upside potential of 3.5%. Analysts’ price targets range from a low of $220.00 per share to a high of $350.00 per share.
The Bottom Line on Meta Stock
Meta has a lot of exciting products and innovations that could help sustain its current rally, and the Metaverse could be a driver a few years from now.
Over the nearer term, AI innovations and new social platforms like Project 92 could help keep Meta stock's momentum going strong. Through the ability to quickly monetize hot new tech, Zuckerberg has found a way to prove the doubters wrong in record time!
Disclosure
Affirm Holdings
(
NASDAQ:AFRM
) stock recovered swiftly after witnessing pressure from Apple’s (
NASDAQ:AAPL
) introduction of the Pay Later service earlier in March. Apple’s entry into the BNPL (Buy Now, Pay Later) space is a significant threat to AFRM’s business. However,
Affirm CEO Max Levchin said that the company witnessed no impact from Apple Pay, while he believes that AFRM has “structural advantages” over the
tech giant.
Affirm Stock Gains Significantly
After falling earlier this year, Affirm stock gained about 70% since the start of May. Affirm stock benefited significantly from its strong third-quarter results, where its credit performance improved, led by a decline in delinquencies.
Additionally, its Q3 gross merchandise volumes and
revenue came in better than its guidance. Further, transactions from active customers increased by 34%. Overall, solid volumes, expense control, and operating leverage augur well for its plan to achieve profitability (on an adjusted operating income basis) by the end of this year and could support the uptrend in its stock price.
Affirm Has Upper Hand Over Apple in the BNPL Space
Speaking to
Mizuho Securities analyst Dan Dolev, AFRM’s CEO Levchin said that the company did not witness any impact on its performance from Apple’s entry in the BNPL sector. Levchin added that AFRM has structural advantages over Apple due to its direct relationships with the merchants and underwriting expertise.
Levchin added that the company's new products, like Debit+ (a BNPL debit card that consumers can link to their bank accounts), will likely expand its addressable market. Moreover, inventory management for merchants provides new growth opportunities.
Whether Apple Pay creates challenges for Affirm remains a wait-and-watch story. Nonetheless, Dolev reiterated a Buy rating on the stock following his discussion with the company’s CEO. In a note to investors dated June 13, Dolev said that AFRM stock is trading “roughly in line with the peer group,” which is “conservative given AFRM’s position as the market leader in BNPL.”
Dolev assigned a price target of $17 on AFRM stock.
Is AFRM Stock a Buy, According to Analysts?
Despite the improvement in its credit performance and expense control, higher funding costs and pressure on consumer spending keep analysts sidelined. AFRM stock has received four Buy, five Hold, and two Sell recommendations for a Hold consensus rating. Moreover, as AFRM stock has gained quite a lot, the
average AFRM stock price target of $14.70 implies 11.82% downside potential from current levels.
Disclosure
Meta Platforms META recently launched VoiceBox, a new AI model that leverages generative AI to generate and edit speech in various ways. It learns from the context and performs tasks that it was not trained for.Voicebox can create
When it comes to artificial intelligence (AI) stocks, few draw more attention than Nvidia (NASDAQ: NVDA). Its graphics processing units (GPUs) are the most popular to train AI models, making the stock a nearly perfect picks-and-shovels play for the AI revolution.
All three major indices are now up more than 20% from their bear market lows, leading some pundits to declare a new bull market is in the air. While "bull market" is as much a term of art as a hard investing concept, the stock market rally this year shouldn't be ignored, especial
Warren Buffett isn't what you'd call a tech guru. The legendary investor has been notoriously slow in the past to invest in companies with major technological advances. He readily admits that tech is outside of his wheelhouse.