Apple Is the World’s Most Valuable Stock. It’s Still Underestimated. — Barrons.com

/ / Technology /

By Alex Eule Fed Day was the highlight of the week, but Apple deserves an honorable mention. Friday was Apple’s annual holiday, with new iPhone 16 models arriving in stores. It’s a joyous moment for Apple fans. For investors, it’s more complicated. The skilled folks on the Dow Jones Market Data team have tracked Apple’s stock around every iPhone release. By now, there’s an ample sample size across 17 years. The stock has declined an average of 0.1% on the day new iPhones are announced. On launch day — a week or two later — shares slip another 0.1%. Over the following week, Apple slightly underperforms the market. Day traders are free to short the iPhone launch, but everyone else should go long — way long. Six months out from iPhone releases, Apple stock has returned an average of 11.7%, eight percentage points better than the S&P 500 index. All […]

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Adobe Stock Is an Unappreciated AI Play. It’s Time to Buy. — Barron’s

/ / Technology /

Shares fell after earnings despite signs that the company is monetizing its artificial-intelligence offerings. By Jacob Sonenshine Adobe’s earnings report painted a pretty picture of its ability to turn artificial intelligence into paying customers. But the reaction to its disappointing guidance was anything but pretty. That has created a buying opportunity in its stock. There was a lot to like about Adobe’s third-quarter results, with both earnings and sales easily topping estimates. The market, though, focused on management’s somewhat disappointing outlook, which included a forecast for “net new annual recurring revenue” — representing the sales Adobe expects to bring in from new customers or from increasing monthly subscription payments — to come in at $550 million in the fourth quarter, up 9% quarter over quarter. The fourth quarter usually sees double-digit growth, and the stock tumbled 13% after the report. It has since settled around $510. The market reaction was

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Micron Earnings Expected to Deliver Bad News. Why Citi Says Buy the Stock.

/ / Technology /

By Angela Palumbo Micron Technology reports earnings next week and while many analysts are pessimistic about what guidance the chip maker will provide, a Citi analyst still said buy the stock. Citi analyst Christopher Danely wrote in a research note Friday that he spent time chatting with investors this week about their expectations for Micron’s earnings, which will be released after the stock market closes on Sept. 25. His takeaway: a lot of pessimism. “We estimate roughly 80% of investors are bearish on Micron with every hedge fund we spoke with being negative but a few mutual funds being positive,” Danely wrote. While shares of Micron have risen 4.7% this year, they have recently taken a tumble. As of Thursday’s close, the stock has dropped 42% from its all-time closing high of $153.45 hit on June 18. There’s a few reasons for the shift in sentiment. For one, broader semiconductor

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FedEx Cuts Full-Year Outlook After Posting Lower Profit, Revenue in 1Q

/ / Industrials /

FedEx cut its outlook after posting lower profit and revenue in its fiscal first quarter, dragged down by a shift in the mix of it business that saw reduced demand for priority services, increased demand for deferred services and constrained yield growth. The Memphis, Tenn., package-shipping company on Thursday posted a profit of $790 million, or $3.21 a share, for its three months ended Aug. 31, compared with $1.08 billion, or $4.23 a share, in last year’s quarter. Adjusted per-share earnings were $3.60, missing the $4.75 that analysts polled by FactSet forecast. Revenue fell 0.5% to $21.6 billion. Analysts were looking for $21.87 billion, according to FactSet. Chief Executive Raj Subramaniam said the company remains focused on transforming its network, improving efficiencies and lowering costs, adding that he remains confident in the value-creation opportunities the company has ahead. For its fiscal 2025, FedEx now expects per-share earnings between $17.90 and

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Fed Rate Cut ‘Very Bullish Backdrop’ for AI and Big Tech, Wedbush Says

/ / Technology /

The Federal Reserve’s decision to lower the federal funds rates rate by 50 basis points is a “very bullish backdrop” for a risk-on trade of big tech companies and artificial intelligence heading into 2025, Wedbush said in a note Thursday. The rate cut was the “missing piece” in the puzzle as a lot of investors were looking for a green signal for the tech growth trade into this year’s end and 2025, analysts led by Daniel Ives wrote. The tech supply chain is preparing for a huge growth period ahead as roughly $1 trillion of artificial intelligence capital expenses are expected to be on the horizon in the near future, the analysts said. “We continue to strongly believe its 9 pm in the AI Party that goes till 4 am,” Wedbush said. Alongside Nvidia (NVDA) and Microsoft (MSFT), many other tech companies are joining the AI party including Oracle (ORCL),

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Oracle Stock Is Heading for a Record Close. An Upgrade Is Helping.

/ / Technology /

By Emily Dattilo Shares of Oracle are on track for another record close, and there is reason to believe the rally will continue, Melius Research argued on Monday. Analysts Ben Reitzes and Jack Adair upgraded shares of the enterprise software company to Buy from Hold. They lifted their target for the price to $210 from $155. Shares rose 6.2% to $172.02 in afternoon trading, putting them on track for a record high, according to Dow Jones Market Data. The previous closing record was $162.03 on Friday. “You could say we are late, upgrading a stock that is up 54% year-to-date — but we could be just in the middle of a move,” the team wrote. “We see close to $8.50 in terms of an EPS run rate within 2 years — and with our biggest worries muted — we find it hard not to put a 25x multiple on a

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ASML’s Investor Day to Shift Market Focus to Longer Term

/ / Technology /

The market focus on ASML Holding will likely shift away from the short term to 2026 and 2027 when the Dutch semiconductor-equipment maker hosts an investor day on Nov. 14, UBS analysts write in a note to clients. The analysts say ASML’s earnings on Oct. 16 should provide a near-term boost for the stock as they expect to see solid orders from Taiwan Semiconductor Manufacturing Co. and Samsung Electronics, but the market will likely focus more on the investor day the following month. ASML shares trade 3.6% higher at 696.60 euros.

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Lower Interest Rates Yield a Loser: Berkshire Hathaway — Barrons.com

/ / Financials /

Andrew Bary Berkshire Hathaway was a major beneficiary of the sharp increase in short rates from 2022 through early this year but now stands to lose given the drop in short rates now unfolding with the Federal Reserve’s half-point cut in a key short rate Wednesday. Berkshire had the largest holdings of cash and equivalents of any U.S. company at $277 billion at the end of the June, compared with Apple at $153 billion and Alphabet at $101 billion. The bulk of Berkshire’s cash is invested in short-term Treasury bills which have maturities of under a year. Berkshire CEO Warren Buffett is partial to three and six-month T Bills that are auctioned weekly by the Treasury. Berkshire held $234 billion of T-Bills at the end of June. Berkshire’s interest and other investment income was up sharply in the first half of 2024, rising 80% to $4.5 billion before taxes from

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Adobe Stock Is an Unappreciated AI Play. It’s Time to Buy. — Barrons.com

/ / Technology /

By Jacob Sonenshine Adobe’s earnings report painted a pretty picture of its ability to turn artificial intelligence into paying customers. But the reaction to its disappointing guidance was anything but pretty. That has created a buying opportunity in its stock. There was a lot to like about Adobe’s third-quarter results, with both earnings and sales easily topping estimates. The market, though, focused on management’s somewhat disappointing outlook, which included a forecast for “net new annual recurring revenue” — representing the sales Adobe expects to bring in from new customers or from increasing monthly subscription payments — to come in at $550 million in the fourth quarter, up 9% quarter over quarter. The fourth quarter usually sees double-digit growth, and the stock tumbled 13% after the report. It has since settled around $510. The market reaction was understandable, if dubious. The lower-than-expected guidance could be a sign that competition from other

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Salesforce Unveils New AI Strategy, Will Charge $2 per Conversation

/ / Technology /

Salesforce (CRM) unveiled a new business model in which it will charge $2 per conversation held by its new generative AI-powered bots, Bloomberg reported Tuesday. The business model represents a change for Salesforce from building human-assisting AI tools to increasing dependence on AI-powered bots, the Bloomberg report said.

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Salesforce Needs to Sell Its Latest AI Vision — Heard on the Street — WSJ

/ / Technology /

Low expectations make for unfamiliar ground at Salesforce. Given the uncertainty that artificial intelligence has cast over the cloud software industry, they may also be welcome. As Salesforce kicks off its annual confab known as Dreamforce this week, the pioneer of the software-as-a-service — or SaaS — category finds itself with a lot to prove. Years of turbocharged revenue growth through relentless sales deals and acquisitions has finally slackened, with Salesforce’s revenue expected to rise at a single-digit percentage for the first time ever in the current fiscal year. That has put a bit of a cloud over the company’s stock price, which is down about 2% since the start of the year. At least Salesforce has plenty of company. Adobe, Workday, Atlassian and Snowflake are just a few of the SaaS providers that have seen their shares take a hit; the BVP Nasdaq Emerging Cloud Index has shed more

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