My top 10 things to watch Thursday, Jan. 18
- The Dow is set for a slightly lower open after three straight sessions of losses. But after back-to-back declines, the S&P 500 and the Nasdaq are set to open higher Thursday.
- Bank of America upgrades Club holding Apple to buy from neutral and increases price target to $225 per share from $208. The analysts cite higher growth rates; better cycle with artificial intelligence features coming on board. Calls the END of negative revisions. Wednesday’s close at just over $182 per share is around the technical level it must hold.
- Bernstein raises Meta Platforms price target to $435 per share from $375. The analysts call Meta an AI winner. I see a lot of AI in their products. Close partners with fellow Club name Nvidia. Meta CEO Mark Zuckerburg talks to Nvidia CEO Jensen Huang all the time.
- ServiceNow is a layup trade ahead of earnings on Jan. 24. Moth to the flame: Oppenheimer raises price target to $800 per share $750. ServiceNow is being positioned as the principal way enterprises can adopt AI, per CEO Bill McDermott’s sweeping comments at Davos. Nvidia first, Microsoft second, and ServiceNow third in profits from AI.
- Azure and Office strength to drive quarter at Club name Microsoft. Still weaker PCs. Better commercial Office growth Azure growth of 26.5%. BofA raises Microsoft price target to $450 per share from $430.
- KeyBanc raises Palo Alto Networks price target to $390 per share from $315 and keeps overweight (buy) rating. The Club name’s CEO Nikesh Arora tells CNBC that cybersecurity demand will only intensify in 2024. He cited three reasons that highlight why investors keep pushing the stock to record highs.
- Taiwan Semiconductor Manufacturing gives the hi sign to the chip bottom by saying inventories are clean. All a part of the turn/refresh of personal computers. Focus on smaller nanometer, not necessarily Club name Nvidia. Maybe better to look at Apple and Bullpen stock Advanced Micro Devices.
- Humana gets crushed. Down more than 13% after a warning about an increase in demand for health-care services leading to higher medical costs in the fourth quarter. Humana reports earnings on Feb. 5. Rival UnitedHealth disclosed this week higher medical costs in its Q4 results, which led us to worry that Humana might be experiencing the same thing.
- Discover Financial. Horrendous bad loans. Quite surprising to see such high reserves. They know how to handle it but not if it keeps going. The underwriting standards here are shocking.
- Downgrades and price target cuts on Schwab. But the stock is down much more than the pathetic non-leveraged Morgan Stanley, which must go down in keeping with its lack of leverage. Morgan Stanley agrees to pay $249 million to the Justice Department and SEC for deception in block trading. Did the Club name pay too much for E-Trade ($13 billion in 2020)? It seems like they have nothing to show for down market. Kind of like Goldman Sachs.
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