Marvell, Gap, RH and more

Check out the companies making headlines before the bell.

Marvell Technology — Marvell Technology surged 17% in premarket trading after reporting a top-and-bottom beat in its first quarter. Marvell posted adjusted earnings of 31 cents per share, topping estimates for 29 cents, according to Refinitiv. It reported $1.32 billion in revenue, while analysts polled by Refinitiv expected $1.3 billion. Marvell expects revenue growth to accelerate in the second half of the fiscal year.

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Gap — Shares of the apparel retailer jumped more than 11% premarket despite the company posting net losses and declining sales Thursday for its most recent quarter, as investors cheered Gap’s big improvement in its margins due to reduced promotions and lower air freight expenses.

Workday — Workday jumped 9% after topping first-quarter expectations on the top and bottom lines. The financial management software firm also named a new chief financial officer, Zane Rowe, and raised the low end of its full-year subscription revenue guidance. 

Autodesk — Autodesk rose 1% in premarket trading. The software company reported first-quarter results in line with analysts’ expectations. It gave second-quarter guidance that was weaker than expected, while its full-year outlook was roughly in line. 

Deckers Outdoor — Deckers Outdoor fell 2% in premarket trading. The lifestyle footwear company reported fourth-quarter results that exceeded analysts’ expectations, according to Refinitiv. However, it gave full-year earnings and revenue guidance that was lower than expected. 

RH — Shares of the retailer fell more than 3% in premarket trading despite RH beating estimates for its fiscal first quarter in a Thursday evening report. The company reported $2.21 in adjusted earnings per share on $739 million of revenue. Analysts surveyed by Refinitiv were looking for $2.09 in earnings per share on $727 million of revenue. However, RH’s second-quarter revenue guidance was short of expectations and the company warned of increased markdowns. 

Ulta Beauty — Ulta Beauty slid 9% in premarket trading even after the beauty retailer posted strong earnings and revenue for the first quarter. It very slightly raised full-year revenue guidance and reaffirmed earnings per share guidance. However, comparable sales grew slightly less than expected.

— CNBC’s Tanaya Macheel and Jesse Pound contributed reporting.

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3 Pharma Stocks That Will Boom Thanks to AI

Pharma stocks - 3 Pharma Stocks That Will Boom Thanks to AI

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A Deloitte report about artificial intelligence (AI) in the life sciences puts it bluntly. Big data is the new currency for biopharma firms. The quantum leap forward in computational power that AI affords gives pharmaceutical firms the ability to develop products faster than ever before. This has lead investors to start looking for the top AI-driven pharma stocks.

The intersection of data science and machine learning makes research and development fundamentally different than it was previously. Molecule discovery will be much faster than it ever was. That promises to increase the development of drugs and reduce the time to commercialization. The applications go on and on but the overall takeaway is the same, AI will reduce time-consuming bottlenecks in drug discovery and lead to massive growth for firms that best take advantage of the technology. In time that will lead to massive revenue growth overall as the lengthy discovery phase is shortened. Lets take a look at some pharma stocks to buy that are taking advantage of AI technology.

Exscientia (EXAI)

Exscientia (NASDAQ:EXAI) has to be one of the most exciting pharma stocks in relation to AI. It’s a relatively cheap stock with the potential to triple based on analysts’ consensus.

EXAI very well may reach that target price based on the recent news that the company announced its 6th molecule created through its generative AI platform to enter the clinical stage. That particular drug is intended to treat psychiatric diseases and is being developed with Sumitomo Dainippon Pharma (OTCMKTS:DNPUF). It is the 3rd AI-developed drug created for Sumitomo with Exsceintia’s AI platform. Exscientia has clearly proven its value to Sumitomo and should market that alliance heavily in growing its platform. 

Exscientia is developing its own pipeline of AI-driven drugs as well. That includes 2 oncology drugs that are progressing toward clinical studies currently. The company’s design as a service platform will help to diversify its business as it can sell the service while also developing drugs to be owned outright. 

Schrodinger (SDGR)

Schrodinger (NASDAQ:SDGR) is similar to Exscientia in terms of its business. Both firms boast computational AI platforms utilized in discovering potentially useful molecules. And both companies direct that service toward in-house development and as a service. 

Schrodinger’s physics-based computational platform is utilized for drug discovery. However unlike Exscientia, it goes further and has utility across multiple industries including aerospace, energy, semiconductors and electronics among others. Schrodinger’s pipeline includes 9 drugs in clinical trials currently, dozens more in discovery and preclinical stages, and 2 FDA-approved drugs. 

SDGR is already booming thanks to AI and machine learning. Drug discovery revenue more than more than doubled year-over-year in Q1 2023, reaching $32.6 million. That accounted for roughly half the company’s sales which grew by 33% during the same period. 

The company expects drug discovery revenue to be between $70 to $90 million in 2023. It receives significant distributions from time-to-time that can spike revenues as well. 

Predictive Oncology (POAI) 

Predictive Oncology (NASDAQ:POAI) is an early-stage AI pharma stock with a differentiated business model. The company owns a biorepository of tumor samples, a lab and a good manufacturing practice facility. All of which differentiates the company from more data-heavy firms that might lack actual samples from which to derive insights. 

Yet, Predictive Oncology doesn’t really make much money now. It reported $300 thousand in revenues in Q1 2022, that dropped to less than $250 thousand in Q1 2023. But those low sales matter far less than the company’s partnerships announced this quarter. Specifically, its partnership with Cancer Research Horizons (CRH) which is the largest private funder of cancer in the world. CRH spends roughly $70 million on research annually. 

That partnership suggests that Predictive Oncology could soon have far greater resources at its disposal. That in turn could be good news for POAI stock. 

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks.Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

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7 Bank Stocks I Wouldn’t Touch With a 10-Foot Pole

Not all bank stocks are bad ones. Finding some gems out there is certainly possible, but I won’t be beating down the bushes looking for opportunities in the banking sector.

These days there’s more to dislike about bank stocks than there is to appreciate them. Regional bank stocks are depressed because of the Silicon Valley Bank failure. That exposed some other weaknesses in the sector and made regional bank stocks a losing bet.

But there are other reasons to give bank stocks the side eye right now.

Banks are heavily reliant on the economy. They need people to have confidence in the economy and be willing to spend and borrow.

Yes, credit card debt continues to rise, and the American consumer is resilient. You also can’t ignore the debt ceiling debate in Washington and be concerned about how the U.S. defaulting on its obligations would be disastrous.

Besides what it would do to the stock market, such a downturn would surely hurt credit quality and trigger more defaults. That would hurt bank stocks and their bottom lines.

These days, bank stocks are also under fire from fintech. Banks must rapidly adjust in the next few years before they become another Blockbuster.

Even Treasury Secretary Janet Yellen says that more bank mergers may be needed. That’s not helping bank stocks, either.

I’m casting some serious doubt on a handful of bank stocks.

Bank of America (BAC)

I currently own Bank of America (NYSE:BAC), but I’m thinking twice these days about BAC stock. And I certainly wouldn’t recommend opening a new position in this megabank soon.

Bank of America is one of the biggest banks in the U.S., so it’s closely watched as as bellwether of the banking sector. And it’s telling that BAC stock is down 15% this year, reaching levels not seen since 2020.

It’s reasonable to expect the Federal Reserve to closely monitor banks now that we’ve seen some failures. Bank of America could be subjected to additional stress tests and regulations that could weigh down shares.

Bank of America has a dividend yield of 3.1%, but even that’s not tempting under these conditions. BAC stock has a “D” rating in the Portfolio Grader.

Valley National Bancorp (VLY)

New Jersey-based Valley National Bancorp (NASDAQ:VLY) is one of those regional banks that investors are a little more skeptical about lately. Valley National operates on the East Coast, in the New York region. It specializes in working with midsized landlords in the New York City area.

According to S&P Global, Valley National is the biggest bank in the U.S., with a ratio of commercial real estate loans to capital exceeding the regulators’ recommendations.

That’s a red flag considering the troubles that caused other banks to fail this year. It’s no wonder that VLY stock is down more than 30%.

Earnings for the first quarter missed analysts’ expectations for revenue and EPS. The bank reported $490.32 million and EPS of 30 cents versus expectations of $523.66 million and EPS of 33 cents.

VLY stock has a “D” rating in the Portfolio Grader.

Zions Bancorporation (ZION)

Headquartered in Utah, Zions Bancorporation (NASDAQ:ZION) is a regional bank that operates in 11 states from California to Texas. Founded in 1873, Zions First National Bank was owned by the Church of Jesus Christ of Latter-day Saints before Keystone Insurance bought a majority share in 1960.

It changed its name to Zions Bancorporation a few years later.

Despite the interesting history, Zions is a troubled regional bank today. Its deposits fell by 16% in the first quarter on a year-over-year basis.

And with 52% of uninsured deposits, it’s in the Top 20 of banks with uninsured deposits as a percentage of total deposits.

ZION stock is down 41% this year and has an “F” rating in the Portfolio Grader.

PacWest Bancorp (PACW)

If you overlay the stock chart of Zion and PacWest Bancorp (NASDAQ:PACW), they look almost identical, but the dip is more extreme. PacWest, a regional bank based in Los Angeles, has many of the same issues as Zion and other regional banks.

I’d have to be slightly more cautious of PacWest than Zion because of its location. California regional banks seem to have more exposure to the Silicon Valley breed of tech stocks that helped trigger this whole mess.

PACW stock sold off hard after it disclosed that it lost nearly 10% of its deposits in just a week. PacWest stock is down nearly 70% just this year – even after the stock jumped 10% on some welcome news that PacWest was able to sell off some real estate loans and reduce its exposure.

Some investors may be willing to give PACW a chance and try to do some bottom-feeding, but not me. PACW stock still has a well-deserved “F” in the Portfolio Grader.

Western Alliance (WAL)

Western Alliance (NYSE:WAL) is a regional bank company in the southwest, with headquarters in Phoenix and locations in Arizona, Nevada and California.

Unfortunately for investors, Western Alliance hasn’t been immune to the hazards of being a regional bank. Shares traded for more than $80 earlier this year. But after a 38% drop in 2023, WAL stock is now less than $40.

But there’s at least some good news with WAL stock. Western Alliance announced that its deposits increased by $2 million this year, rising from roughly $47.6 million on March 31 to $50 million as of May 12. The report indicates that Western Alliance may be able to start recovering from the Silicon Valley Bank debacle as customers feel more confident in depositing their money.

If you love bank stocks, I give you credit for looking for a silver lining, but this is still one of those bank stocks I’m not going to touch. WAL stock has a “D” rating in the Portfolio Grader.

Comerica (CMA)

Texas-based Comerica (NYSE:CMA) is one of the bigger regional bank changes, with locations from Florida to Michigan. The bank has assets of about $91.13 billion, up slightly from a year ago.

But like many other regional banks, Comerica is being tarnished by the same brush. It was among nearly a dozen regional banks that got a downgrade from Moody’s.

And like other names on this list, CMA stock is down big this year, falling more than 40%.

Comerica did manage to beat analysts’ expectations on both earnings and revenue in the first quarter. It posted revenue of $990 million and EPS of $2.39, while the experts expected revenue of $965.34 million and EPS of $2.27.

CMA stock will be hard-pressed to repeat that performance. The stock currently has a “D” rating in the Portfolio Grader.

Truist Financial Corp. (TFC)

Truist Financial Corp. (NYSE:TFC) is another of the larger regional bank stocks. The company is a merger of BB&T and SunTrust Banks, which combined in 2019.

From its headquarters in Charlotte, North Carolina, Truist has customers from Georgia to New Jersey and as far west as Tennessee.

And while the bank has a relatively low ratio of loans to deposits, which indicates it’s healthier than others on this list, TFC stock has the same challenges. This year, the stock is down 30%, falling big in early March as the Silicon Valley shock reverberated through the sector.

Is it possible for Truist and some of the other names on this list to bounce back? Of course. But why would you bet on that? There are too many headwinds to chase some profits in the banking sector today. TFC stock will have to live with the “D” it gets from the Portfolio Grader.

On the date of publication, Louis Navellier had a long position in BAC. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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3 Dividend Stocks Yielding 20% (or More!)

top high-yield dividend stocks - 3 Dividend Stocks Yielding 20% (or More!)

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In the investing world, top high-yielding dividend stocks can offer robust income streams, potentially acting as strong pillars for conservative investors looking to meet their financial milestones. However, the waters can get murky when you delve into the territory of dividend stocks yielding 20% or more. High yields often emerge from companies grappling with inherent weaknesses or structural problems that can jeopardize the sustainability of their dividends. Therefore, investing in high-yield dividend stocks calls for prudence.

Over the past year, the stock market has been incredibly volatile, sparking exasperation in both bulls and bears. When done right, adding a sprinkle of high-yield dividend stocks can act as a cushion against inflation while enhancing total returns. These high-yield dividend stocks could serve as lifeboats in turbulent market waters, allowing your wealth to grow steadily over time. This dual role makes them an attractive option for investors looking to balance both income and growth in their portfolios.

Petroleo Brasileiro (PBR)

Petrobras distributor in the industry and supply sector.. PBR stock

Source: rafastockbr / Shutterstock.com

Dividend Yield: 54.6%

Leading Brazilian oil and gas player Petroleo Brasileiro (NYSE:PBR), under the stewardship of CEO Jean-Paul Prates, remains committed to maintaining its focus on oil output, squashing concerns over a dramatic pivot towards renewable energy sources.

It’s coming off a rock-solid year, with top-line growth exceeding historical performances. However, the slowdown in oil prices has weighed down its recently released results. Nevertheless, its results are still mighty impressive, with its net income of $7.7 billion exceeding analyst estimates by 19.4%. Moreover, on the revenue front, despite the dip in total commercial production, revenues were up by double-digit margins, beating estimates by more than $300 million.

Furthermore, Petrobras’ board gave the green light to roughly $4.94 billion in dividend payments due later this year while hinting at potential changes to its payout policy. This includes potentially returning more capital to shareholders through stock buybacks, reiterating its aim to ensure investor satisfaction.

Star Bulk Carriers (SBLK)

Plenty of shipping containers stacked at the Port of Hamburg and blue sky

Source: Hieronymus Ukkel / Shutterstock.com

Dividend Yield: 28%

Cyclical stocks such as Star Bulk Carriers (NASDAQ:SBLK) are usually on the radars of investors with a high-risk tolerance. When the global pandemic struck, SBLK stock took a substantial hit, but reopening headwinds have lifted SBLK stock out of the doldrums. Nevertheless, it’s up against new challenges in China’s geopolitical uncertainty, economic weaknesses and sluggishness.

However, there’s reason to be bullish over SBLK stock, as my fellow InvestorPlace contributor Chris Markoch highlighted that the International Monetary Fund forecasts the dry bulk carrier fleet to grow up to 2.7% this year.

Star Bulk has a strong record of putting its shareholders first, returning over $1 billion to investors through dividends and share buybacks over the past few years. Its monstrous yield of more than 28% is a testament to its quality as an income stock.

CVR Partners (UAN)

a tractor cultivating a farm from an aerial view

Source: Shutterstock

Dividend Yield: 38%

CVR Partners (NYSE:UAN) has positioned itself as a front-runner in the fertilizer industry, registering massive growth in its profitability margins amid skyrocketing fertilizer prices last year due to the Ukraine-Russia conflict. However, fertilizer prices have retreated by more than 40% from last year’s peak.

Though prices are down, it posted a relatively strong performance through effective capacity utilization, lower natural gas costs, and it selling its production at higher fourth-quarter prices. On top of that, fertilizer prices are still well above what they were several years back. Hence, there is much to like about its long-term prospects, especially when looking at its eye-popping dividend yield.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

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7 Meme Stocks to Buy Before They Soar to New Heights in 2023

Memes are simply images and videos with humorous text included that tend to spread rapidly across the internet. Combine them with stocks and you get wallstreetbets. That’s where the majority of meme stock information is communicated. For an easier-to-navigate listing of meme stocks investors can go here. That’s where all of the companies discussed below were found. These shares are not risky overall despite the reputation that investing in meme stocks may have. There are a few bets to be sure. But those are substantiated using the reasoning of the commenters which is logical. That said, let’s get into those meme-worthy and investment-grade shares.

Nvidia (NVDA) 

When investing in meme stocks, Nvidia (NASDAQ:NVDA) is far and away the most talked about stock on memestocks.org. It also happens to be a highly respected firm with a lot of positives worth understanding. Meme stocks have a reputation for being risky. Nvidia, despite being one of the largest companies globally, is certainly risky, too. It carries a beta of 1.77 meaning it moves much faster than the markets overall. It produces rapid gains but also produces rapid losses when the market reverses. That said, Nvidia is currently riding a massive upswell. In fact, it has more than doubled in 2023 after beginning at $148. It currently trades for $311, not far from pandemic highs of $324 reached in late 2021. 

A lot of the wallstreetbets discussion centers on whether NVDA is a bubble stock ready to pop. It’s certainly more than fully priced currently. But NVDA is the AI chip king and it should be able to ride that for some time until data suggests otherwise. 

AMD (AMD) 

When also talking about investing in meme stocks, AMD (NASDAQ:AMD) is a strong one to consider.  Along with Nvidia, it’s also part of the AI story. The idea is that companies will make their own chips as well and buy from AMD. One particular commenter references Nvidia’s CUDA GPU programming platform and its eroding moat. If and when that position deteriorates, AMD should logically be able to grab back a piece of the pie. Even better, AMD is projected to continue to grow this year and next. Tech stocks have stabilized after a dismal 2022. 

Microsoft (MSFT) 

Microsoft (NASDAQ:MSFT) is another solid bet when investing in meme stocks. Like the previous companies discussed above, most of the conversation around MSFT focuses on the AI boom these days. Even better, this year, the company should report around $211 billion in revenues. That would represent a 1.8% increase over 2022’s $207.6 billion in sales. It’s a modest bump but investors have to remember that the pandemic accelerated tech to unsustainable growth levels.

Here’s the kicker: Microsoft is expected to grow to $235 million in sales by 2024. That would represent 11% growth if correct and arguably justifies all the AI hype ongoing now about MSFT. It’s also very easy to argue that Microsft is entering another pandemic-like growth opportunity based on its AI investment in OpenAI. That makes a lot of sense. 

Halozyme Therapeutics (HALO) 

Halozyme Therapeutics (NASDAQ:HALO) is one of the most referenced companies on wallstreetbets. The biotech stock is also a fundamentally sound investment. In fact the company is well past breaking even and produces net gains on a GAAP basis. And, it’s also growing rapidly with a 38% increase in revenues year over year. That growth is expected to continue this year and through 2024. The positive news for investors is that there’s 50% upside beyond current prices remaining for HALO stock(3). 

Western Alliance Bancorp (WAL) 

Western Alliance Bancorp (NYSE:WAL) is the only stock on this list that is considered high-risk. Wallstreetbets investors think WAL shares have a chance to produce returns for a few reasons. After its collapse, it remains a value based on the target price for one. But they were more interested in the fact that ‘Big Short’ investor Michael Burry took big positions in regional banks in the first quarter. That included 125,000 shares of Western Alliance Bancorp. One commenter rightly noted that we have no idea of his continued ownership, hedging strategy, or calls and puts. Instead, we only know that he established a position. 

Deposits continue to be the primary concern in discussing regional banks. WAL stock appears to be healthy from that perspective. Deposits have grown by $1.8 billion quarter-to-date with insured deposits accounting for 79% of all deposits. Only 68% of deposits were insured as of March 31.  

Caterpillar (CAT) 

Investors don’t hear much regarding Caterpillar (NYSE:CAT) stock these days. There’s no infrastructure bill being considered that could spur growth. Likewise, there’s not an overall growth boom at all that would catalyze development and heavy equipment sales. Instead, there’s a sense of foreboding backed by fears of a recession. That would spell big trouble for CAT as sales would almost certainly slump.

So the markets continue to view Caterpillar through that lens, seeking any signals in either direction. When the company last released earnings in late April, the signs were positive. Sales increased by 17%, margins increased from 13.7% to 17.2%, and CAT topped prior guidance. 

The company has been able to not only increase its sales volumes but also the prices of its products. That may seem to be counterintuitive given how expensive heavy-duty equipment is but that’s what has happened. CAT stock prices have fallen nonetheless since the release on continued macroeconomic fears. Buy for the dividend income and steady price and disregard overarching fear. 

Snowflake (SNOW) 

Public cloud firm Snowflake (NYSE:SNOW) and its stock have had a very strong 2023. Share prices have risen from $124 to $176. That resurgence is largely explained by a rebound in tech stocks as Fed rate hikes taper downward. 

As it stands now, The Fed is likely to halt rate hikes later this year. That will result in surging tech stocks and a renewed focus on growth stocks rather than value stocks. That’s why Snowflake is likely to continue to receive positive market reception. 

The company reported $2.066 billion in revenues in 2022. Sales are expected to reach $2.87 billion this year. 38% annual growth is near the 40% hypergrowth threshold. And Snowflake is expected to see $3.91 billion in sales in 2024. That’s about 36% growth. Yes, it loses a lot of money still. But it has high margin product and as soon as losses show signs of narrowing it’ll really surge. 

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks.Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

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Steer Clear of NIO Stock as It Veers Off Course With New Venture

NIO stock - Steer Clear of NIO Stock as It Veers Off Course With New Venture

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Loyal investors of China-based electric vehicle (EV) manufacturer Nio (NYSE:NIO) have suffered staggering losses since early 2021. Could Nio’s latest foray into another business venture put NIO stock in the fast lane? Don’t get your hopes up, as Nio really needs to focus on its vehicle deliveries, which aren’t as robust as some investors might have expected.

I’ve already discussed how Nio CEO William Li is stubbornly refusing to slash its EV prices to compete with Tesla (NASDAQ:TSLA). This could turn out to be a grave error for Nio during a time when many shoppers can’t afford high-priced vehicles.

Now, Nio’s management is making another decision that I happen to disagree with. I’m not suggesting that every investor has to give up on Nio altogether. Just be aware of the risks, as Nio seems to be spreading itself thin and should really just stick to manufacturing clean-energy vehicles.

Nio Tries Out Another Unproven Venture

First, there was the so-called NIO Phone, which is little more than a punchline now. Then, Nio shuttered its insurance brokerage subsidiary company due to regulatory problems. Now, Nio’s trying its hand at another business enterprise that doesn’t involve manufacturing new-energy vehicles. So, will the third time be a charm for Nio?

Here’s the scoop, courtesy of Reuters. Apparently, Nio “has invested in a startup firm that is developing fusion technologies,” known as Neo Fusion. Furthermore, Nio Fusion “will research and develop technologies that aim to bring controlled fusion for commercial uses globally in two decades.”

Nio is evidently all-in on this concept, as the automaker has invested 995 million yuan in Nio Fusion. Moreover, Nio’s intent is to “facilitate the R&D and commercialization of nuclear fusion technology by making financial investment into this project.”

Fusion-Tech Foray Isn’t Bullish for NIO Stock

Granted, Nio’s investment in fusion technologies isn’t as laughable as the NIO Phone. However, bear in mind that this is 995 million yuan that Nio isn’t spending on its core business.

At this point, Nio’s management reminds me of a friend who has a new business venture idea every year. He always starts off with a high level of excitement about each new idea, but the enthusiasm inevitably peters out after a while.

Do you recall Nio’s new partnership with energy technology company Tibber, back in March? Whatever happened to that? Shouldn’t there be an update on this collaboration by now? Nio seems to want to be everywhere at once, but the company should concentrate on improving its EV sales.

Bear in mind, Nio delivered 10,378 vehicles in March of this year, followed by just 6,658 deliveries in April. Clearly, Nio and its stakeholders could benefit greatly if the company simply channels its capital and attention toward increasing Nio’s vehicle sales.

Don’t Take Any Chances With Risky NIO Stock

Nio could simply stick to what it does best: making EVs. The company hasn’t fully proven itself with that business model, as it’s still unprofitable. Yet, at least Nio has a great deal of experience and know-how as a vehicle manufacturer.

In contrast, Nio’s foray into fusion technologies is extremely risky. It will undoubtedly divert capital and effort away from Nio’s core business.

As the company continues to move far afield, Nio’s stakeholders should be very concerned. The company doesn’t need to have another NIO Phone type of failure in its track record. So, while it’s not necessary to panic-sell NIO stock, I definitely don’t recommend adding any shares now.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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3 Tech Stocks to Buy Before They Soar to New Heights in 2023

Tech stocks to buy - 3 Tech Stocks to Buy Before They Soar to New Heights in 2023

Source: shutterstock.com/A_B_C

Tech stocks have had a great start to 2023 after the sell-off in 2022. With the growing demand and success of cloud computing, augmented reality and artificial intelligence, tech companies are ready for a solid comeback. The Nasdaq Composite Index was down 33% in 2022 and several stocks took a beating. Many companies suffered more than expected but things are looking better this year and now is a good time to start looking for the top tech stocks to buy. 

With a soft inflation report and the economy slowly getting back to normal, it looks like tech stocks are set to gain. If you are thinking about investing in tech stocks right now, you will be able to take home big gains as they soar to new highs in 2023. With that in mind, let’s take a look at the three tech stocks to add to your portfolio.

Nvidia (NVDA)

I’ve said it before and I’ll say it again, Nvidia (NASDAQ:NVDA) is one company that can make you a millionaire. NVDA stock has been red hot since the beginning of 2023. Year-to-date (YTD) it has already generated a nearly 160% return. If you missed that opportunity its not too late, now is a good time to buy into one of the soaring tech stocks. 

Nvidia reported a blowout first quarter report with top and bottom-line growth. Its revenue stood at $7.19 billion, up 19% from the previous quarter and EPS came in at $1.09. Its data center sales came in at $4.28 billion, a 14% annual increase. The data center sales are running at an annualized rate of $17 billion up to this quarter and management expects the data center numbers to grow throughout 2023. 

Nvidia’s numbers show that the future is in artificial intelligence (AI) and its automotive division. That includes both chips and software for self-driving cars and grew by 114% year-over-year (YOY). With the growing AI chip demand, they expect a revenue boom in the coming quarters and this means there is a massive upside potential.

Nvidia has a bullish forecast and a massive demand for its product. The company stated that they are ramping up production to meet the growing demand. Nvidia is at the right place at the right time and it is in a position to make the most of the AI boom.

Microsoft (MSFT)

Microsoft (NASDAQ:MSFT) is one company that has always been on top of everything tech. It maintained that reputation with the hype surrounding AI and Microsoft’s investment in OpenAI’s ChatGPT. It is set to benefit significantly from this investment and has also unveiled several new AI-based search features for its search engine and internet browser. The best thing about Microsoft is that the management is ready to take on new challenges and adopt the latest technologies to its products. The investment in ChatGPT will give it an edge in the competitive industry and will also help improve the effectiveness of the core products by allowing task automation. 

An already established, solid business, Microsoft reported better than expected quarterly results and the management expects that AI will drive future growth. MSFT stock is up 31% YTD. It has generated over 200% returns in the past five years and analysts expect the stock to hit $400 this year. 

I believe Microsoft is a solid addition to your portfolio as it is set to benefit from the AI boom. Like Nvidia, the company is growing at a significant rate in the cloud business. Management expects this segment to increase by 15% to 16% YOY in the next quarter. When you invest in Microsoft, you are investing in an already established business and you do not have to worry about the company setting infrastructure or wait for the AI-driven demand to take off so that you can benefit from the stock. This also justifies the high stock price. 

Ignore the temporary ups and downs and load up on MSFT stock. This is one to buy and hold for the decade as it will continue to soar.

Apple (AAPL)

One solid reason I’d bet on Apple (NASDAQ:AAPL) is its loyal customer base. No matter the market situation, Apple has remained a favorite. Many Mac and iPhone users are so loyal to the product that they wouldn’t switch to another brand for anything. Investors can turn to AAPL stock if the market is uncertain and you won’t be disappointed. 

The tech giant enjoys a lofty valuation today and AAPL stock is up 37% YTD. This shows the solid business model and strength of its products and services. In the recent quarter, the company saw a 3% revenue decline YOY. It reported a revenue of $94.84 billion and enjoys a gross margin of 44%. Its iPhone revenue was the highest at $51.33 billion, followed by the services segment revenue at $20.91 billion. The iPhone revenue grew 2% in the quarter and the company expects the next quarter to be similar to this one. 

The potential for Apple to expand is massive. It is working on a self-driving car and hasn’t even touched the foldable phone market. The business is great and the future looks stable. It is growing its services segment which means the company isn’t solely dependent on the iPhones.

AAPL stock is one of the tech stocks to buy before soaring as it inches closer to $200.

On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.

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Will RIVN Stock Soon Ride Out of the Junkyard? Not So Fast

For more than two months, shares in electric vehicle maker Rivian Automotive (NASDAQ:RIVN) have languished at prices in the low-to-mid teens per share. That’s a far cry from the more than $30 per share RIVN stock traded for as recently as December.

This former hot stock’s high-water mark was $172 per share, hit not too long after the company’s 2021 IPO. Yet while clearly in the stock market junkyard, many analysts do not believe that Rivian will stay there.

In fact, these optimists believe that the situation can only improve from here. However, taking a closer look, it’s hard to see why they have come to this conclusion. Instead, it seems as if the issues that have plagued the company since 2022 are likely to persist.

With this, you may want to fully exercise caution, instead of becoming cautiously optimistic. Here’s why.

RIVN Rivian Automotive $14.20

Several Analysts Remain Upbeat About RIVN Stock

Earlier this month, Rivian released its latest quarterly results. For the quarter ending March 31, 2023, the EV maker missed on revenue, but reported narrower-than-expected losses. Of greater importance to the market, the company also maintained its production guidance for 2023.

Right after reporting these mixed results, members of the sell-side covering RIVN stock released their respective post-earnings research notes. As mentioned above, several analysts had positive takeaways from the latest earnings release.

As Seeking Alpha reported May 10, Barclay’s Dan Levy believes “the worst has passed” for the company. In his view, things are moving in the right direction for Rivian.

Levy also believes that the company has plenty of room to make further operational improvements, as the production ramp-up continues. With this, Levy gave shares the equivalent to a “buy” rating, albeit with just a $22 per share price target.

BofA’s John Murphy is another member of the sell-side who remains bullish. Citing many factors, Murphy believes that this EV company remains one of the top up-and-coming names in this sector.

The analyst rates RIVN a “Buy,” and gives it a $40 per share price target. Still, while their respective argument have substance, I’m still skeptical.

Why The Situation Could Worsen

The aforementioned analysts aren’t the only ones that believe RIVN stock will soon ride out of the junkyard. Plenty of investors believe that this will happen once production levels ramp up, and the company leaps forward to substantial sales and a path to profitability.

But just like how there are factors that may suggest Rivian’s fortunes could dramatically improve in the coming quarters, some factors point to the situation worsening from here. For one, although there are high hopes for the pending production ramp-up, it should be noted that, while up year-over-year, Rivian’s deliveries fell sequentially during the March quarter.

Those bullish on the stock may counter this by pointing to the company’s reservation backlog. Yet while its backlog totaled 114,000 vehicles last September, Rivian has since stopped providing this figure.

It’s unclear whether reservations have dropped off, whether because of frustration from production delays, or because of recent macro headwinds like high interest rates.

Even if the company produces (and sell) 50,000 of its electric trucks and vans this year, there’s another negative factor that could get worse, dampening investor sentiment. That would be the company’s still-heavy cash burn.

Bottom Line

Earlier this month, I argued about why cash burn is a big risk for Rivian. Even GAAP losses came in narrower-than-expected, negative operating cash flows did rise last quarter. As the ramp-up accelerates, so too could the rate in which the company goes through its existing cash position.

This may result in the company tapping into dilutive financing much sooner, and to a greater extent, than presently anticipated. If this ends up happening, it could mean yet another sell-off for shares.

I’m not alone in taking a far more bearish view on Rivian compared to the analysts mentioned above. Last quarter, famed investor George Soros’ firm unloaded much of what remained of its RIVN position.

While the next quarterly earnings could vindicate the optimists, as more backs the view RIVN stock stays in the junkyard, caution remains best for now.

RIVN stock earns a D rating in Portfolio Grader.

On the date of publication, Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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