A significant ruling by US Judge Amit Mehta has determined that Google holds a monopoly in the internet search market, reminiscent of the historic antitrust case against Microsoft. This judgment has marked a pivotal moment in the ongoing scrutiny of major technology companies and their market practices.

The case, initiated by the US government in 2020, accused Google of maintaining its search market dominance through the establishment of formidable barriers to entry and feedback mechanisms that solidified its position.

Judge Mehta’s ruling, spanning 300 pages, found Google in violation of Section 2 of the Sherman Act, which prohibits monopolistic practices.

Comparisons with Microsoft’s 1999 antitrust case

The ruling draws clear parallels with the 1999 antitrust case against Microsoft, where the software giant was found to have used its Windows operating system to stifle competition from rival browsers like Netscape Navigator. A settlement in 2001 required Microsoft to stop disadvantaging competitors in PC deals.

Judge Mehta highlighted the similarity in how both companies leveraged their dominant market positions. He noted that just as Microsoft’s agreements restricted Navigator’s market penetration, Google’s distribution agreements have curtailed the search volumes of its competitors, thereby protecting Google’s market share.

A key aspect of Google’s strategy, as identified in the ruling, is the “power of the default”. Google’s agreements with Apple and Samsung, which cost billions of dollars annually, ensure that Google remains the default search engine on these popular devices, a position that significantly limits user migration to rival search engines.

Implications for Google’s business practices

A separate trial scheduled for 4th September will determine the penalties or remedies that Google will face. During this trial, Google has the option to appeal, a process that could extend over two years, akin to Microsoft’s appeal and subsequent settlement with the Department of Justice (DOJ).

Legal experts suggest that the court might mandate Google to terminate certain exclusive agreements and make it simpler for users to access other search engines. Although financial penalties are possible, the more substantial risk to Google lies in potential changes to its business practices, which could impact its profitability. For instance, losing its default search status on smartphones could lead to a significant reduction in Google’s core search business.

In the second quarter, “Google Search & Other” generated $48.5 billion in revenue, constituting 57% of Alphabet’s total revenue. Any mandated changes could, therefore, have a profound impact on the company’s financial performance.

The role of artificial intelligence in the competition

In its defense, Google is likely to argue that the competitive landscape has evolved with the advent of artificial intelligence (AI). This new dynamic was not present when the DOJ filed its initial lawsuit. Google might introduce evidence showing how AI developments have intensified competition, a point it has tried to minimize in the wake of the rise of AI-driven services like OpenAI’s ChatGPT.

Neil Chilson, former chief technologist for the Federal Trade Commission, noted that AI could indeed disrupt Google’s market dominance. He suggested that while the court’s definition of the market currently implicates Google, emerging technologies in search and advertising could present significant competition.

Uncertainty for investors and potential outcomes

Following the ruling, Google’s shares saw a minor decline, reflecting broader market trends rather than a direct response to the judgment. Investors remain cautious as Judge Mehta did not outline potential remedies, leaving significant uncertainty.

Experts believe that while a breakup of Google is unlikely, changes to its business model could be on the horizon. Unlike the Microsoft case, where distinct business lines could be spun off, Google’s integrated services present a more complex scenario for potential divestiture.

The upcoming trial is expected to clarify these issues. Bill Baer, former head of antitrust divisions at both the FTC and DOJ, indicated that the Microsoft case precedent strengthens the argument against Google. The specifics of what the DOJ will seek and what the judge will approve remain uncertain.

The post Google’s antitrust ruling draws parallels to Microsoft’s 25-year-old case: Here’s how appeared first on Invezz

Aurora Cannabis Inc. (NASDAQ: ACB) reported a return to profitability in its first fiscal quarter, driven by the strength of its medical cannabis division. 

Shares of the licensed cannabis producer surged 11% on Wednesday following the announcement.

Impressive financial turnaround

The Canadian company reported C$4.8 million in net income for the quarter, a significant turnaround from the C$20.2 million loss recorded in the same period last year. 

This remarkable performance was bolstered by a 16% year-over-year increase in plant propagation revenue, which reached C$23.1 million ($16.84 million). 

Consequently, Aurora’s overall revenue climbed to C$83.4 million, surpassing analysts’ expectations of C$77.6 million and the C$74.7 million reported in the previous year.

Medical cannabis: The driving force

Aurora’s medical cannabis segment experienced a robust 13.5% growth, with revenues reaching C$47.2 million. 

This growth offset a 10% decline in consumer cannabis revenue, which fell to C$11.5 million. 

The strength in the medical cannabis sector also contributed to an 87% increase in adjusted EBITDA, which rose to C$4.9 million.

CEO Miguel Martin expressed confidence in the company’s ability to build on its achievements in key markets such as Germany, Australia, and the UK. 

Martin highlighted Aurora’s commitment to operational excellence and strategic growth, aiming to sustain positive momentum and enhance its market position.

Positive free cash flow and fiscal discipline

Aurora Cannabis also reported a positive free cash flow of $6.5 million for the quarter. 

The company attributed this success to continued strength in medical cannabis, fiscal discipline, and a solid balance sheet. 

Martin emphasized these factors as critical to maintaining positive free cash flow and supporting Aurora’s long-term growth strategy.

Despite the positive earnings report, Aurora Cannabis stock is still down more than 30% from its year-to-date high in late April. 

However, the stock has rallied over 100% in the past five months, reflecting growing investor confidence in the company’s turnaround efforts.

Analyst say ‘hold’

Wall Street analysts have a consensus “hold” rating on Aurora Cannabis stock, with a target price of approximately $6.34 per share. 

This valuation is roughly in line with the stock’s premarket trading price on Wednesday, suggesting that the current market sentiment may consider the stock fairly valued.

Is it too late to invest?

The positive earnings report and significant growth in the medical cannabis segment have reinvigorated investor interest in Aurora Cannabis. 

However, potential investors should note that the stock does not currently pay a dividend, and with its recent price surge, it may be seen as fully valued by the market. 

As such, it might be prudent to carefully consider the stock’s future growth potential and market conditions before making an investment decision.

Aurora Cannabis’ return to profitability and strong performance in the medical cannabis sector marks a significant milestone for the company. 

However, investors should remain cautious and consider the stock’s valuation and market dynamics before making any investment decisions.

The post Aurora Cannabis posts profit with 87% EBITDA growth, shares jump 11%: Is it too late to invest? appeared first on Invezz

Molson Coors Beverage Company (NYSE: TAP) is in the spotlight today following a downgrade by TD Cowen. Despite Molson Coors posting better-than-expected Q2 earnings and reaffirming its 2024 outlook yesterday, TD Cowen adjusted its rating on the company, moving from a Buy to a Hold, and lowering the price target from $68 to $58.

This revised target indicates a modest upside potential of just 7% from the stock’s recent closing price. TD Cowen’s decision to downgrade Molson Coors was influenced by the company’s inability to fully capitalize on the market share gains that emerged from the Bud Light boycott.

The anticipated benefits from increased shelf space—up 13% this year—did not translate into expected revenue gains. The slow progress in premiumization efforts, particularly around the Blue Moon rebranding, also factored into the downgrade.

Despite these challenges, the analysts at TD Cowen believe that Molson Coors’ 2024 guidance is achievable but unlikely to excite investors unless the company demonstrates a path to more robust organic growth.

Molson Coors Q2 earnings

The second quarter of 2024 was a bright spot for Molson Coors, with the company reporting a 7.9% increase in profits, translating to $1.92 per share, surpassing consensus estimates by $0.24.

Revenue slightly declined by 0.6% year-over-year to $3.25 billion but still exceeded forecasts by $70 million. Molson Coors’ ability to maintain its top-line performance while enhancing its bottom line—up 5.2%—amidst a challenging environment underscores its operational resilience.

In terms of its 2024 outlook, Molson Coors remains optimistic, maintaining guidance for low single-digit growth in net sales on a constant currency basis.

The company expects underlying income before taxes to rise mid-single digits, with similar growth anticipated for diluted earnings per share.

Capital expenditures are projected at $750 million, and free cash flow is estimated at $1.2 billion, signaling continued financial health and investment capability.

Challenges ahead

Fundamentally, Molson Coors is navigating a complex landscape characterized by evolving consumer preferences and intense competition. Its diverse brand portfolio, including core brands like Coors Light and Miller Lite and premium offerings like Blue Moon, positions it well to capture various market segments.

However, the company’s reliance on traditional beer sales amidst shifting consumer trends toward premium and alternative beverages presents both opportunities and challenges.

Growth drivers for Molson Coors include strategic initiatives such as the Acceleration Plan, which aims to boost revenue through innovation and premiumization, and targeted investments in key markets like EMEA and APAC.

The company is also exploring opportunities in non-alcoholic and spirits categories, reflecting a broader industry trend of diversification beyond traditional beer offerings.

Valuation and risks

Valuation-wise, Molson Coors presents a compelling case with a price-to-earnings (P/E) ratio significantly below the industry average. Trading at a forward P/E ratio of below 10, the stock is currently undervalued compared to peers like Anheuser-Busch InBev, which commands a much higher multiple.

Molson Coors’ dividend yield of over 3.27% and a robust share buyback program further enhance its appeal as a value investment.

Despite these positives, Molson Coors faces several risks that investors should consider. The global nature of its operations exposes the company to geopolitical tensions, such as the Russia-Ukraine conflict, and macroeconomic factors like fluctuating fuel and electricity costs.

Additionally, beer consumption is sensitive to economic conditions, potentially impacting sales during downturns.

The company’s strong balance sheet, with almost $1.65 million in cash and manageable debt levels, provides a cushion to navigate these challenges.

Molson Coors has been proactive in managing its capital structure, with a $2 billion share buyback program underscoring its commitment to returning value to shareholders while maintaining flexibility for growth investments.

As investors weigh the company’s performance against market expectations, examining the stock’s technical indicators can provide further insights into its potential price movements and guide future investment decisions. Let’s delve into the charts to better understand Molson Coors’ price trajectory and market positioning.

Rangebound between $49 and $68

Molson Coors’ stock has been on a long-term downtrend since 2016. Though it made a noticeable bounce back after falling to $30 levels during the 2020 crash, it remains significantly below its 2016 peak.

TAP chart by TradingView
Since 2023 the stock twice tried to break above the $68 level, but failed, reinforcing the long-term downtrend. Hence, investors who are bullish on the stock and expect it to surge significantly must wait for that level to be crossed for any significant upward move. If it doesn’t the stock can remain range bound for a long time.

Traders who are bearish on the stock must also not short it at current levels because it is trading close to its long-term support near $49 as can be seen in the chart. If the stock fails to drop below that support level, it can continue to trade in the $49-$68 range in the near future.

The post TD Cowen downgrades Molson Coors, lowers price target to $58: Is it time to exit? appeared first on Invezz

Maersk CEO Vincent Clerc has addressed concerns over a potential US recession, citing robust freight demand as evidence of economic stability. 

Despite recent fears of an economic slowdown, exacerbated by weaker-than-expected jobs data, Clerc remains optimistic about the US economy’s resilience. 

His comments come at a crucial time, as container demand is often viewed as a barometer of broader economic health.

Clerc emphasized that while US inventories are higher compared to the beginning of 2024, they are not at levels that would signal a significant economic downturn. 

According to Clerc, the current freight demand reflects ongoing consumer confidence and a steady economic environment. 

This resilience is particularly noteworthy given that container demand is frequently used to gauge macroeconomic strength.

Maersk’s Q2 financial results 

Maersk’s second-quarter financial results reveal a mixed picture. 

The company reported a year-over-year decline in profit and revenue, partly due to increased costs from Red Sea diversions. 

Despite these challenges, Clerc remains hopeful, attributing the sustained freight demand to strong Chinese export activity.

The shipping giant reported an EBIT margin of 5.6% for Q2, a significant improvement from the -2.0% margin in the previous quarter. 

However, this was not enough to prevent a decline in Maersk’s stock price on Wednesday. 

The company’s free cash flow also decreased to $397 million in Q2, although Maersk raised its full-year guidance for free cash flow from $1.0 billion to $2.0 billion. 

The firm anticipates global container market growth of up to 6.0% for the year.

Contrasting views on economic indicators

Maersk’s optimistic outlook on shipping demand contrasts with a recent report from Container xChange. 

The leasing platform’s data suggests that demand is lagging behind inventories, potentially indicating future challenges for retailers and container traders. 

This perspective aligns with data from the US Census Bureau, which showed a 5.33% increase in US retail trade inventories to $793.86 billion in May compared to the previous year.

Despite the differing views on economic indicators, Maersk’s strong performance in container volumes and adjusted financial forecasts suggest a positive outlook for the shipping industry. 

Clerc’s confidence in the US market’s resilience reflects a broader belief that current consumption levels will sustain demand for freight services.

The post Maersk CEO dismisses US recession fears, cites strong freight demand despite weaker Q2 financials appeared first on Invezz

In a notable development for the automobile industry, wholesale used-vehicle prices surged by 2.8% in July, showcasing the sector’s adaptability amidst evolving market conditions. 

This significant increase, reported by the Manheim Used Vehicle Value Index (MUVVI), marks a reversal from previous trends and highlights a burgeoning recovery in the used-vehicle market.

July’s price jump defies annual declines

The latest MUVVI data reveals a July index rise to 201.6, despite a 4.8% year-over-year decline. 

This month-over-month growth indicates a positive shift in market dynamics and suggests that the used-vehicle sector is gaining traction after a period of instability. 

Jeremy Robb, Senior Director of Economic and Industry Insights at Cox Automotive, notes that this uptick is reflective of improved wholesale values, likely driven by increased sales conversions and reduced declines in vehicle values.

Robb attributes the rebound to a variety of factors, including lower lease maturities and constrained supply in key vehicle categories. 

“Wholesale value declines slowed in late June, and this trend continued into July, resulting in appreciation over the month,” Robb explained. 

This gradual stabilization underscores the sector’s resilience and potential for further growth.

Recent data from the Manheim Market Report (MMR) indicates a series of weekly gains, challenging traditional value fluctuation trends. 

The Three-Year-Old Index saw a 1.1% increase over four weeks, surpassing historical averages. 

Segment-specific observations reveal varied price adjustments across different vehicle types. 

While year-over-year declines persist, the rate of these declines has significantly slowed, with midsize and compact cars experiencing notable month-over-month gains.

Retail used-vehicle sales rise

Retail used-vehicle sales rose by an estimated 5% in July compared to June, although they fell 2% year-on-year. 

The average retail listing price for a used-vehicle decreased by 0.5% over the past month. 

Conversely, new-vehicle sales dropped by 2.0% year-over-year and 3.0% from June, with the seasonally adjusted annual rate (SAAR) for July at 15.8 million, slightly higher than June’s 15.2 million.

Fleet sales experienced a 14.0% year-on-year decline in July. However, new retail sales are projected to increase by 1.6% year-over-year, with a predicted retail SAAR of 13.1 million units.

Rental risk and consumer sentiment

Rental risk prices and mileage displayed mixed trends in July, with rental risk unit prices down 0.6% year-on-year. 

Average mileage for rental risk units fell by 3.0% from the previous year but rose by 10.3% since June. 

Consumer confidence also showed signs of improvement, with the Conference Board Consumer Confidence Index increasing by 2.6% due to favorable future expectations. 

However, plans to purchase a vehicle within the next six months dropped to their lowest level in nine months, and consumer sentiment according to the University of Michigan fell by 2.6% in June and 7.1% year-on-year.

The substantial rise in wholesale used-vehicle prices in July signals a resilient and adaptable market, despite ongoing challenges. 

The interplay of sector-specific trends, consumer sentiment, and broader economic indicators provides a comprehensive view of the current automotive landscape, offering valuable insights for industry stakeholders navigating this dynamic environment.

The post US wholesale used-vehicle prices surge 2.8% in July despite ongoing challenges appeared first on Invezz

Following an impressive second-quarter earnings report, Upstart Holdings Inc (NASDAQ: UPST) has witnessed a significant shift in analyst perceptions.

Notably, Citi upgraded the company from ‘Sell/High Risk’ to ‘Neutral/High Risk,’ simultaneously raising their price target from $15 to $33.

This adjustment reflects an improved outlook based on several factors including an enhanced conversion ratio and reduced impact from macroeconomic variables on credit losses.

Meanwhile, Piper Sandler maintained a ‘Neutral’ rating but raised their price target to $31 from $28, suggesting a cautious yet optimistic view of Upstart’s near-term prospects.

Upstart stock surges post Q2 earnings

The positive adjustments in analyst ratings closely followed the announcement of Q2 results, propelling a dramatic surge in Upstart’s stock price.

Initially, shares soared over 25% at market opening and have continued to climb, currently trading up over 45%.

Q2 Earnings Overview

Upstart reported a Q2 Non-GAAP EPS of -$0.17, surpassing expectations by $0.22, with a revenue of $128 million, which also exceeded forecasts by $3.47 million.

Despite a year-over-year decline in revenue by 5.7%, these results indicate a significant improvement over anticipated figures.

The company achieved a transaction volume with 143,900 loans originating, showing a robust conversion rate of 15%, which marks a substantial increase from the previous year’s rate.

The financial results also revealed some challenges, with a net income loss widening to $54.5 million from $28.2 million in the same quarter of the previous year.

However, the operational metrics provide a mixed view; while the income from operations and net income figures were down, the contribution profit stood at $76.1 million with a contribution margin of 58%.

AI advancements and financial outlook

CEO Dave Girouard highlighted significant advances in Upstart’s AI model and operational efficiencies as key drivers behind the quarter’s performance.

The company’s AI-driven lending platform continues to attract and retain lending partners, a crucial aspect of its business model that leverages technology to streamline the personal loan process.

Looking ahead, Upstart provided an optimistic financial outlook for Q3, projecting revenues of around $150 million against a consensus of $135.33 million.

This projection is supported by anticipated revenue from fees and an expected positive EBITDA in the fourth quarter, suggesting confidence in sustained revenue growth and potential profitability.

Market and economic implications

The positive outlook and performance come amidst a backdrop of mixed economic indicators and a challenging macroeconomic environment.

The Upstart Macro Index, which estimates macroeconomic impacts on credit losses, alongside commentary from analysts, suggests cautious optimism but highlights the need for sustained positive trends before a more bullish outlook can be confidently established.

Valuation concerns & long-term prospects

Despite the promising outlook, some analysts expressed valuation concerns, particularly highlighting the company’s high EBITDA multiple and substantial debt levels.

Upstart’s focus on integrating AI for more precise risk assessments and better loan terms is a testament to its pioneering role in transforming the lending industry.

However, the ongoing need to manage debt and navigate a fluctuating economic landscape poses significant challenges that could impact its long-term growth trajectory and market position.

Having delved into the intricacies of Upstart’s financial health, market position, and broader economic implications, we now turn to another crucial aspect of our investment analysis.

Let’s shift our focus to the technical charts to decipher the stock’s price trajectory.

This technical examination will complement our fundamental analysis, providing a holistic view of Upstart’s potential as an investment opportunity in the fintech sector.

Upstart became a darling of the stock market immediately following its IPO in December 2020 with its stock surging above $400.

However, that excitement was short-lived as the stock crashed rapidly soon after, losing over 95% of its value by early 2023.

Then it again saw a rapid surge from below $12 to above $70 by August 2023, which was again followed by a crash below $20 soon after. However, since then it has regularly found support near the $20.60 level and resistance above $37.

Strong upward momentum but immediate resistance nearby

As the stock continues its rapid surge today, investors must pay attention to how it behaves around $35.1, which is the 61.8% Fibonacci retracement level from the previous swing low and swing high.

Moreover, they should also take note of how it behaves around its medium-term resistance level above $37.

UPST chart by TradingView

Only if it crosses above these two levels and gives a weekly closing above them can one safely say that the stock has entered a new uptrend and fresh long positions can be initiated.

Traders who continue to have a bearish outlook on the stock have a low-risk entry on their hands right now.

But, be mindful that this entry is a low risk only because the stop loss level at $38.10 is close to where the stock is trading now and it is exhibiting high volatility towards the upside which can be high risk.

 If the stock again faces resistance around $37 and momentum shifts, it can fall to $21 levels in the coming weeks or months where one can book profits.

The post Upstart Holdings jumps over 45% after Q2 earnings beat estimates, Citi upgrade: Should you buy? appeared first on Invezz

Entain (LON: ENT) share price has been in a steep sell-off this year, making it one of the worst performers in the FTSE 100 index. It tumbled to a low of 528p on Thursday, its lowest swing in years. It has dropped by over 78% from its highest point in 2021.

Entain has dropped by almost 50% this year while DraftKings has retreated by less than 1% while Flutter Entertainment (FLUT) is up by about 10% this year. 

Entain’s business has been under pressure

The sports betting and online gaming industry boomed during the pandemic as millions of users participated using their stimulus checks. 

At the time, Entain was one of the hottest companies in the sector, thanks to its family of brands, including Ladbrokes, Coral, BetMGM, Bwin, and PartyPoker.

As a result, MGM and DraftKings placed a large bid that valued the company at over £11 billion. Entain, formerly known as GVC Holdings, rejected the offer, noting that it severely undervalued it. 

Turns out, Entain was wrong as its stock has tumbled, valuing it at over £3 billion. Its revenue growth has stalled, competition has risen, and the firm has been forced to pay some huge fines. 

Entain is one of the many pandemic winners that have struggled. Some of the other names are fintech companies like PayPal and Block and telemedicine companies like Teladoc Health. 

Entain earnings ahead

The most recent annual results showed that Entain’s net gaming revenue rose by 11% in 2023 to £4.7 billion while its gross profit rose to £2.9 billion. However, the company made a big loss of over £878 million.

This loss was because the company agreed to pay £585 million to settle a case brought by the HM Revenue & Customs division. The case alleged that the company failed to put enough measures in place to prevent corruption in Turkey. 

Meanwhile, in April, the company published its trading statement, which showed that its business was not growing as expected. Its total gaming revenue rose by 6% on current currency while its business, excluding the US fell by 2%. Inthe UK and Ireland, its NGR dropped by 7% while in its international rose by 8%.

Therefore, the Entain share price will be in the spotlight on Thursday as it publishes its financial results. In its statement, the company will likely highlight some of the measures it is taking to turn around its struggling brand.

A few months ago, it was reported that the company had hired Moelis to advise on potential sales of some of its top international brands like BetCity, Enlabs, CrystalBet, and Enlabs. Such a sale would simplify the company, reduce costs, and potentially lead to a special dividend to investors. 

It would also mark an end to the company’s history of acquisitions that made it one of the biggest players in the sports betting and gambling industries. 

Entain is also facing other challenges in one of its important markets: the United States. Its main business there is a big stake in BetMGM, a company that seeks to compete with the likes of DraftKings and Fanduel, which is owned by Flutter Entertainment. 

The challenge is that BetMGM is a cash incinerator that expects to lose over $240 million while the management sees its EBITDA being $500 million in 2026.

Entain’s challenge is that it is competing with much bigger companies that have substantial cash and equity. While online betting in the US soared to $11 billion in 2023, most of this came from DraftKings and FanDuel, which made over $7 billion.

Conquering the US will be an expensive endeavor that will consume substantial cash from Entain’s balance sheet. Indeed, Evoke, formerly known as 888 Holdings, exited the US, arguing that the costs were prohibitive. 

Is Entain a good stock?

The broader betting and online gambling industry is not doing well, with most stocks in the sector lagging the broader market. Flutter Entertainment, which moved its listing to the United States, has moved into a bear market as it dropped by 20% from its peak.

Similarly, DraftKings stock has crashed by over 36% from its highest level this year as signs of a slowdown emerge. 

Technically, Entain share price seems like it is quite cheap. It remains below all moving averages while the Relative Strength Index (RSI), Stochastic Oscillator, and the Relative Vigor Index (RVI) have all pointed downwards.

Therefore, there is a likelihood that the stock will bounce back as the new Chief Executive Officer, Gavin Isaacs, works to implement a turnaround. Isaacs is an industry veteran with over 25 years in the sector. 

Therefore, a recovery could see the Entain share price rise to over 643p, its lowest swing in May. Besides, Entain is a well-known company with some of the top brands in the industry and oe that is implementing its turnaround well/

The post Entain share price gets oversold ahead of earnings appeared first on Invezz

Shopify stock was up 22% today following an earnings beat and a healthy forecast for the rest of the year.

The company saw increased demand for its e-commerce software despite a slowdown in consumer spending.

The results are remarkable because competitors like Amazon and Etsy, on their respective earning calls recently, have complained of consumer spending slowdown negatively impacting their businesses. Shopify, however, made such complaints.

The company reported $2.05 billion in sales vs expectations of $2.01 billion. The EPS clocked in at $0.26 against expectations of $0.2. The company’s operating margin was noted at 15% against expectations of 12%.

Diversified across all types of companies

According to Shopify president Harley Finkelstein, his company was able to weather the consumer spending storm because of its diverse customer base.

I think a big part of the reason that we are not seeing the same thing that others might is because we simply have merchants across a ton of verticals and across a ton of [geographies].

The president also mentioned how some of the biggest brands continue to join Shopify’s platform. Brands like Casper, QVC, and Barnes & Noble started using the company’s products this quarter. This is one reason why the company was able to perform better than its competitors this quarter. Consumers are spending less, which means they are spending on quality.

Most high-quality brands are moving to Shopify, bringing with them their customers. As a consequence, Shopify continues to take market share from competitors.

Shopify Point of Sale is another source of revenue that did not exist 5 years ago in the form that it exists now. The gross merchandise value for Shopify’s PoS crossed the $100 billion mark this year.

The fact that a diverse set of businesses prefer Shopify to sell their products means that cyclicality matters less for the company than it does for its competitors. The weaker spending environment therefore isn’t as big a problem as the market thought.

What does it mean for investors?

Since February this year, Shopify stock has nearly halved. In hindsight, this was an overreaction to the assumption that a weaker consumer would lead to lower spending and hence lower earnings for the company. We now know that hasn’t been the case and that the company is upbeat on its performance for the rest of the year.

It may look like the market has overreacted to the earnings report. Despite that reaction, the stock is still available at an attractive price because of the 50% slump since February. Someone getting in now may still be able to squeeze some juice out of the improved short-term prospects of the company.

The post Shopify stock soars 22% on earnings beat despite consumer spending slowdown: Time to buy? appeared first on Invezz

Sunrun Inc (NASDAQ: RUN) is up more than 15% on Wednesday after rival SunPower Corporation (NASDAQ: SPWR) filed for bankruptcy following months of struggles related to higher interest rates.

SPWR recently faced allegations of financial misconduct which contributed to GLJ Research calling SunPower stock “worthless” in July.

But the bane of SunPower could be a boon for Sunrun which is already in talks to bring some of its former dealers on as partners.

On the earnings call this morning, Sunrun chief executive Mary Powell dubbed SPWR bankruptcy an opportunity for Sunrun to “gain share in a financially disciplined and measured way”.

Sunrun stock has recovered almost its entire loss since the start of 2024.

Sunrun brings SPWR executives onboard

Sunrun also hired Ellen Struck and Matt Brost – two former executives of SunPower Corporation on Wednesday. Struck and Brost will head the new homes business at the residential solar solutions company.

“We expect strategic growth in the new homes segment in the coming quarters,” CEO Powell told analysts on the call today.

Additionally, RUN reported a surprise profit for its second financial quarter on Wednesday.

Its revenue also topped Street estimates to deliver confidence that cash generation will fall between $350 million and $600 million in 2025.

Sunrun installed 265 Megawatt hours of storage capacity in the second quarter – up a whopping 152% on a year-over-year basis. You can read the Nasdaq-listed firm’s full earnings release on this link.

Goldman Sachs raises price target on Sunrun stock

Sunrun generated $217 million in cash in the recently concluded quarter. It will remain focused on margins but is committed to launching new products and services to “expand customer lifetime values” in the coming months, as per the company’s press release on Wednesday.

That and the upbeat remarks on the earnings call were sufficient for Goldman Sachs analyst Brian Lee to raise his price target on RUN to $20, which signals the potential for another 5.0% gain from here.

The investment firm expects strong cash flow and SunPower bankruptcy to deliver continued market share gains to Sunrun moving forward.

Lee’s optimism is broadly shared by other Wall Street analysts. The average price target on Sunrun stock currently sits at an even higher $22 which translates to about a 16% upside from here. Still, RUN is not an attractive stock for income investors as it doesn’t currently pay a dividend.

The post Sunrun stock soars 15% after SunPower bankruptcy filing: What you need to know appeared first on Invezz

Renowned investor Jim Cramer has identified two stocks that he believes are undervalued following their recent earnings reports. Cramer is bullish on Advanced Micro Devices Inc (NASDAQ: AMD) and Eaton Corporation PLC (NYSE: ETN), urging investors to consider these stocks amidst their current weakness.

Jim Cramer, host of CNBC’s “Mad Money,” has increased his holdings in both companies. On Tuesday, he added 75 shares of AMD and 25 shares of Eaton to his portfolio.

His Charitable Trust now holds a total of 425 shares of AMD and 300 shares of Eaton. Both companies reported strong quarterly results and positive future guidance last week, yet their stocks have each declined by approximately 7% in recent days.

Why Cramer is bullish on AMD

Advanced Micro Devices exceeded Wall Street expectations for its second quarter, largely due to a significant increase in data center revenue, which more than doubled year-over-year. Based in Santa Clara, California, AMD is the second-largest manufacturer of data center chips, trailing only Nvidia.

Cramer’s optimism for AMD is fueled by the company’s recent upward revision of its MI300X AI chip sales forecast by $500 million.

Additionally, he anticipates that Intel’s struggles to establish a strong presence in the AI market will benefit AMD by allowing it to capture more market share.

Wall Street analysts share Cramer’s positive outlook on AMD, rating the stock as “overweight” with an average price target of $188.

This suggests a potential upside of 40% from its current price.

Why Jim Cramer bought Eaton stock

Eaton Corporation also posted better-than-expected earnings for its second quarter and increased its full-year guidance for organic sales, margin, and adjusted per-share earnings.

Despite this, the stock has taken a 20% hit over the past three months, which Cramer believes presents a buying opportunity.

Cramer commended Eaton’s strong third-quarter guidance, which stands in contrast to broader economic concerns about a potential slowdown.

He noted that the stock is currently as affordable as some of its peers, making it an attractive investment.

Analysts also share Cramer’s positive sentiment towards Eaton, rating the stock as “overweight.”

The average price target for Eaton shares is $344, indicating a potential upside of more than 20%. Additionally, Eaton offers a dividend yield of 1.34%, providing an added incentive for investors to include it in their portfolios.

Both AMD and Eaton have demonstrated resilience and potential for growth, even in the face of recent market volatility.

AMD’s strong position in the data center chip market and its advancements in AI technology position it well for future gains.

Meanwhile, Eaton’s robust earnings and positive guidance suggest it can weather economic challenges better than some of its competitors.

Cramer’s endorsement of these stocks is a reflection of their solid fundamentals and growth prospects. Investors looking for opportunities amidst market fluctuations might find AMD and Eaton to be compelling choices.

Jim Cramer’s recent stock picks, Advanced Micro Devices and Eaton Corporation, present compelling investment opportunities despite their recent dips following strong earnings reports. With solid fundamentals, positive future guidance, and strong endorsements from Wall Street analysts, these stocks are well-positioned for potential gains. Investors may want to consider adding AMD and Eaton to their portfolios to capitalize on these opportunities.

The post Jim Cramer names top two stocks to buy on post-earnings dip appeared first on Invezz