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Washington Makes Huge Semiconductor Moves — Here’s How To Profit

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White House economic and national security officials will meet with leaders of the semiconductor and auto industry on April 12 to talk about the affect semiconductor chip shortages will have on America, according to reports last week.

Here is a group of semiconductor companies to watch this week, along with their performance on the day that report came out.

Nvidia — Up 10.18%

Shares of Nvidia (NVDA) have gained 5.12% ytd as the company pushes through the chip shortage. Nvidia’s target was upgraded by J.P. Morgan after their earnings beat estimates in February. Nvidia was rated as a “B” Buy.

Intel — Up 4.08%

Intel (INTC) announced plans in March to compete with others, like TSMC, for the manufacturing of chips, with a $20 billion creation of two factories in Arizona. The once-leading chipmaker is attempting to regain favor and dominance in the U.S.

Intel fans should be happy with CEO Pat Gelsinger’s aggressive spending to put the company back on better long-term ground. Intel was rated a “B+” Buy.

AMD — Up 6.39%

AMD (AMD) was increased to “outperform” by Northland Capital Markets. AMD was rated as a “B” Buy.

TSMC — Up 12.99%

Taiwan Semiconductor Manufacturing (TSM) wants to invest $100 billion over the next few years to increase its chip making process. Shares of the company are up by 11.7% ytd. TSM was rated as an “A+” Buy.

Qualcomm — Up 8.26%

U.S, antitrust officials have removed their lawsuit against Qualcomm (QCOM) that alleged the firm had abused its position in chips inside smartphones.

The FTC said last week it won’t push for a Supreme Court review of an appeals court ruling last year that found Qualcomm’s practices were not anti-competitive. Qualcomm was rated as an “A-” Buy.

Broadcom — Up 3.09%

Broadcom (AVGO) shares went down last week after a report said Amazon (AMZN) is developing on its own chips for its networks, which might reduce its reliance on the semiconductor giant. Broadcom was rated as an “A” Buy

Micron Technology — Up 9.89%

The CEO of Micron Technology (MU), whose shares increased 23% so far this year, said that Micron is excited for their markets, which are showing great growth. Everything from smartphones and PCs to data centers and autos is in strong demand. Micron had a better-than-expected 2nd quarter adjusted earnings on 30% greater revenue. Micron was rated as a “C+” Hold.

Texas Instruments — Up 7.60%

Texas Instruments (TXN) was upgraded to Outperform at Raymond James with a price target of $220 in February. The company beat its Q4 earnings estimates in January but has been pretty flat since this report. Shares of Texas Instruments have gained 3.7% ytd. Texas Instruments was rated as an “A” Buy.

Author: Scott Dowdy

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The #1 IPO You Shouldn’t Miss In April

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Palantir (PLTR) has been called “Silicon Valley’s most secretive start-up.” In its early days, the company created software to help U.S. intel agents with counterterrorism. But Palantir has gone on to diversify its business, and it now partners with many government agencies and corporate clients, both domestically and internationally.

Palantir had an IPO in Sept. of 2020, and since going public, the stock has increased over 140% from its first day price. The firm still has lots of growing to do, and the stock looks like a great long-term investment.

Possible growth

Government agencies and enterprises generate a huge amount of data. And all that data can be used to gain a big advantage over their competitors. But using data on that scale is very difficult.

Palantir solves this issue with its software combo: Foundry and Gotham. The latter was built for government agencies in the intel and defense sectors, while the former was created to help commercial clients. Both have one goal: They make it possible to analyze, integrate, and make sense of large datasets. This lets clients make better decisions about their business.

Management estimates the total market size to be at $119 billion, and that means Palantir is at the head of a large opportunity.

Even better, in April 2020, Palantir agreed to a $10 million deal with the U.S. Space Force. The newly created Space Force will utilize Palantir’s Foundry software for sensor data and tracking space objects.

Also in 2020, Palantir got a $91 million contract with the U.S. Army to use Foundry and Gotham to train AI models, expanding its AI potential.

In the commercial space, Palantir announced a new agreement with IBM to offer Palantir’s software on IBM’s cloud platform, making it easier for businesses to build AI-powered software.

These agreements — and the many others made last year — could be very large growth drivers for Palantir.

Palantir had only 139 customers in 2020, with average revenue of $7.9 million per customer, up 41% from 2019. This means Palantir’s sales are concentrated and vulnerable. But despite this, Palantir has increased its revenue at a steady pace over the past two years.

The company is also not currently profitable, because it is investing heavily into its operations. Operating cash flow was negative $297 million in 2020.

But with $2 billion in cash and equivalents, the company can afford to lose some money while it grows. As Palantir’s client base enlarges, the company has the possibility to be very profitable, as shown by its 68% gross margin.

Palantir costs 38 times trailing 12-month sales. That pricey valuation, combined with a lack of profitability, has led to volatility — the price is currently lower almost 50% from its 52-week high.

But for investors willing to stand that volatility, this looks like the perfect time to buy the company. Palantir has a huge market opportunity, and the company’s history of partnering with the government on classified work is a testament to its potential.

Author: Steven Sinclaire

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Bitcoin Stuns Everyone With This Unexpected Move 

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Bitcoin has just ended six monthly green candles (consecutively) for the first time since 2013. If history repeats, Bitcoin might enjoy more parabolic gains this coming year.

In April of 2013, Bitcoin ended at around $140 after having six green monthly candles. While the markets would pullback to under $100 over the next couple of months, Bitcoin would then increase 700% over the next six months and hit prices over $1,000 for the first time ever.

Bitcoin had a similar pattern in the time leading up to its parabolic run in 2017, posting five consecutive green candles going into September. While September gave range-bound consolidation, Bitcoin increased again to new all-time highs in October to go from $5,000 to nearly $20,000 by the end of that year.

Bloomberg strategist, Mike McGlone, says Bitcoin might be trading for over $400,000 by 2022, should the markets continue these trends which it previously followed between 2013 and 2017. McGlone recently predicted that Bitcoin is “on the path to becoming a digital reserve asset.”

Veteran market analyst, Peter Brandt, is also bullish on the cryptocurrency, saying that Bitcoin could gain another 250% to break higher than $200,000. “I believe we are in that midpoint where in 2017 Bitcoin stalled for a month or so before we witnessed the final move higher,” he said.

However, previous successes do not guarantee performance going forward and the history of green candles is a little shaky. Despite Bitcoin having five green candles in a row in Q4 2015, the early weeks of 2016 saw Bitcoin decrease by 20% before giving several months of consolidation.

Also, the five months of bullish gains that started 2019 was followed by a long downtrend, with Bitcoin falling over 60% from its 2019 highs during the “Black Thursday” crash of March 2020 and the crypto not regaining its highs until December 2020.

Author: Scott Dowdy

 

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Washington Talks 4th Stimulus Check — And Something Much Bigger

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As millions of Americans are still waiting for their third relief check, support is already building in Washington for the government to do another direct payment.

Over 75 lawmakers have are now urging more cash be given to U.S. households — and the members of the Senate and House don’t want to stop there. They are also seeking recurring payments.

Senators who back regular payments are asking President Biden to include them in his next spending program, a multi-trillion-dollar program to improve bridges, roads, water systems and other U.S. infrastructure.

Just a week after Biden became President, 56 House Democrats sent a letter asking the White House to enact recurring stimulus payments. No exact amount was offered, but some suggested $2,000 monthly payments.

Then, as now, support for additional stimulus checks is far from widespread in congress. Earlier this month, the Democrats, who hold a majority in Congress, struggled to force through President Biden’s $1.9 trillion rescue program, which included $1,400 checks.

The bill passed using a streamlined process that did not require support from the GOP — who all voted no.

And, to get support from their own party, Democratic leaders had to change the income limits for the checks, to more directly target the funds toward low-income households.

It’s not certain if Biden would agree to a fourth relief payment. Thee has been no comment from the administration on whether he would accept a stimulus checks being added to the infrastructure plan.

Author: Blake Ambrose

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Apple Joins Forces With Industry Giant

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Apple (AAPL) is creating a huge battery storage project at its solar-panel farm with Tesla’s (TSLA) utility-scale Megapack batteries.

The Verge reports that Apple will be utilizing 85 Megapacks that will hold the energy produced by the 130-megawatt solar farm, and will be able to store 240 megawatt-hours, an amount that might be able to power 7,000 houses for one day.

The project is a part of Apple’s aim of becoming totally carbon neutral for its products and supply chain by 2030.

The tech company said that over 110 of its suppliers have also signed on to using 100% renewable energy when creating Apple products, with about 8 gigawatts of green energy creation being planned. It is reportedly equal to removing 3.4 million cars from the road. It also means that within ten years, all of Apple’s products will have no climate impact whatsoever.

Tesla created the Megapack in 2019, announcing that it was easier to install and gave 60% more energy density than its Powerpack, giving a “significant” savings in time and costs when compared to other storage systems.

Yet Lisa Jackson, Apple’s VP for policy, environment, and social initiatives, told Reuters the tech giant also understands the challenges of the project due to the unreliability of wind and solar energy: “The challenge with green energy — wind and solar — is that it is intermittent. If we can get success, and we show it works, it takes away from the concerns about intermittency and helps the grid stabilize.”

Apple said it plans to publish the results of its project in the future.

Author: Scott Dowdy

 

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Tech Insider Leaks Incoming Collapse — Here’s When

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A growing number of tech industry insiders believe the semiconductor shortage, which is causing havoc on everything from computer production to the auto industry, will be here for a while.

Cisco CEO Chuck Robbins is among them: “I believe it will require some years to solve if only due to the increasing demand,” Robbins said to Yahoo Finance. “We’ll see a few quarters of true stress on the supply chain, and then I think it will become more predictable.”

Added Robbins, “We must battle our way through it.”

The huge demand for computing equipment during the pandemic has put major stress on the semiconductor industry. And that has led Ford and General Motors to bring back production of very profitable pickup trucks. Also, computer manufacturers have warned about possible shortages of laptop computers.

Intel CEO Pat Gelsinger shares Robbins’ worries on the shortage.

“It takes a couple of years,” Gelsinger said. “We can’t create fabs overnight, it takes years to get built.” Intel has invested $20 billion to create two new cpu-making plants in Arizona in a drive to address the huge demand.

And now, even the government is looking to address the problem.

President Biden promised in February that he would push for $37 billion in funding to help chip manufacturing within America.

Author: Blake Ambrose

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3 Cutting-Edge Stocks For April

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Faced with the pandemic and continuing uncertainty about trends, many companies are in need of stability. Which is something artificial intelligence can help with, making it a hot thing in the software industry right now.

AI applications are anticipated to increase and get lots of attention. If you want to get in on the profits, here are three stocks worth looking into during April:

1. Alphabet

Google-parent Alphabet fared well in 2020, which shares only being down by 5% from all-time record highs. The company has incredible long-term potential as its cloud computing and digital ads business keeps expanding. Given this, and the fact that the stock is selling for only 35 times trailing 12-month cash flow, the stock is hovering in value territory.

Google itself uses AI internally, from its search to its subsidiaries like AV subsidiary Waymo. But Google is also aiding customers in making use of AI. This is especially obvious in its fast-growing Google Cloud sector, where a range of cloud services enhanced with AI can be used to help businesses with a host of operations and infrastructure processes.

With it’s sales growing by double-digit percentages, it is very profitable, and it’s trading for a good price. Buy it now.

2. Invitae

Invitae has been almost halved from its all-time high. But share prices are still over double where they were at the start of 2020.

However, selling for around 16 times trailing 12-month sales, Invitae might be a great long-term bargain. The company’s range of genetic testing possibilities is aiding all kinds of preventative and predictive medicine. And their recent purchase of Archer DX gives them cancer treatment and testing abilities.

The potential is huge. So where does AI fit in? Analyzing genetic code is very complex, but AI software is helping the process.

Invitae is not profitable yet — cash flow was negative $321 million last year with revenue being $280 million due — but it is on the path to breaking even within the next few years. The company could be in for a huge jump in financial results this spring as it gets past the lockdown. I’m looking at an initial purchase of this next-gen healthcare company at these prices.

3. Medallia

Medallia records and gathers data on digital experiences and uses AI to aid businesses in deciding how to improve. And even though last year was so-so, revenue still increased 19% to $477 million. The company expects more growth over the next one year too. But shares have been hit recently, as the outlook for the first quarter of 2021 indicated a y/y growth of just 12% to 14%.

Investors don’t see the long-term possibilities here. The stock price is lower by 17% so far this year, but shares look like a bargain at only 8 times trailing 12-month revenue. The company also used some of its cash to buy analytics company Decibel for $160 million. They believe this will make their platform for improving digital interactions even better as companies update their operations for a new online age.

I expect this cloud stock to stay volatile, but the company is still growing and Medallia is certainly among my buy list.

Author: Steven Sinclaire

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Apple Investors Are Licking Their Lips After This Revelation

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UBS analyst David Vogt has upgraded Apple to a Buy, raising his target by a significant amount to $142 from $115. He stresses the company’s goals in the automotive space, saying that “auto will offset a ‘routine’ iPhone Cycle.”

Vogt says his fresh price target captures a “long-term and stable iPhone demand” with higher average selling price, adding that it reflects the “true” option value of Apple’s possible entry into the auto market.

“Our investigation of the auto industry and Apple’s investment into the industry (with LiDAR patents and self-driving licenses) suggests that Apple’s auto optionality is possibly worth at least $14 per share,” Vogt said in a message to clients. “Apple’s portfolio right now gives significant cash to the company that they will use to enter the battery EV market.”

Vogt predicts that Apple can capture a portion of the battery electric vehicle market due to customer satisfaction already being high for their other products.

“We believe Apple’s strategy and market domination in the smartphone and PC markets should allow them to introduce a BEV and get at least a 5% market share,” he wrote. “Over ten years, we predict the automotive market will likely be nearly 100% EV creating up a 90 million unit sector to new participants with large bases of loyal customers like Apple.”

While Apple is not the first innovative company in the sector, the analyst says the company’s resources should help the company to become a “fast follower”.

“Our founding case assumes Apple gets 8% of the global EV market within 10 years with margins nearing 15%,” wrote Vogt.

On Wednesday Apple was up by 2%. Ytd, shares are lower by 7% as some investors have moved away from tech and into value and cyclical stocks.

Author: Scott Dowdy

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German Company Jolts Wall Street With Earnings

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It’s been a chaotic 12 months for BioNTech (BNTX). The German biotech company created the first coronavirus vaccine to win Emergency Use Authorization in the States. Its partnership with Pfizer (PFE) allowed the vaccine to be produced and given in mass quantities.  

BioNTech gave the first glance at its financial results of this program when it announced fourth-quarter earnings this week. The biotech stock increased over 3% as a result. Here are some highlights from their fourth-quarter documents.

The company had revenue of 354.4 million euros. This gave a large 1,134% y/y increase. It also destroyed analysts’ estimates of around 224.9 euros.

BioNTech also announced a net profit of 366.9 million euros for the fourth quarter. This is compared to last year when the company had a net loss of 58.2 million euros.

At the end of the fourth quarter, the company had cash and cash equivalents amounting to 1.21 billion euros. Compared to the end of 2019, when the firm had only 519.1 million euros on hand.

But BioNTech’s fourth quarter results are just the beginning compared to what is happening next. 

The company says it might generate revenue of almost 9.8 billion euros from its vaccine supply deals using their current estimated dosage target.

However, the biotech company also says that if it creates more supply contracts with Pfizer, its full 2021 manufacturing target could greatly increase.

BioNTech’s focus is not just the vaccine though. Co-founder and CEO Ugur Sahin said, “We see a great opportunity to reinvest the profits from our coronavirus vaccine into accelerating the development of other therapeutics to help people around the world by harnessing the full possibilities of the immune system.”

Author: Blake Ambrose

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Breaking: CDC Just Let Investors In On Next Major Stock Explosion

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The CDC has rebuffed requests by cruise companies to restart cruises from U.S. ports, instead maintaining current prohibitions in place during the summer.

The CDC stated on Wednesday that restrictions put on the industry last year to stop the spread of the pandemic will stay in effect until Nov. 1. The comment comes just moments after a trade group representing the industry called on the CDC to withdraw restrictions and allow a step-by-step resumption of business starting in July.

Investors seem to have believed the CDC would grant the industry’s request, and that anticipation sent stocks of Norwegian Cruises (NCLH), Carnival (CCL) and Royal Caribbean (RCL) higher by more than 5% on Wednesday. But the stocks quickly reversed after the CDC’s response was made public.

 

It seems like the industry has a good argument to make. Other travel stocks have rallied as vaccine rollouts have increased, and President Biden has said he expects that by July 4 we will see conditions normalize in the country.

“The cruise industry has taken up a high threshold for resuming business with a multi-layered group of policies that is meant to be changed as conditions improve,” Kelly Craighead, president of the Cruise Lines International Association, explained in a comment published before the CDC’s decision. “Cruise lines should be treated like other tourism, entertainment and travel sectors.”

The CDC has said that passengers of cruise ships “are at greater risk of infectious diseases, including COVID-19, and outbreaks of the virus have been seen on cruise ships.”

Author: Scott Dowdy

 

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