Podcast: S&P Hits New Record, but Some Stocks Lag Behind
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Miami Herald
15 minutes ago
- Miami Herald
Bank of America flags 3 breakout stocks to watch ahead of earnings
With earnings season heating up, Bank of America just highlighted three breakout picks that could turn heads. It's important to understand that Wall Street is entering its busiest stretch, and all eyes are on the household tech giants. However, some analysts like BofA are quietly flagging stocks that could catch investors off guard. Don't miss the move: Subscribe to TheStreet's free daily newsletter Amazon's (AMZN) is a usual suspect, but AppLovin (APP) and Oddity Tech? That's a curveball. It's clearly an unexpected trio, but the reasoning behind the call might be exactly what investors need to hear at this point. With market expectations sky high, understanding BofA's reasons for doubling down on the three stocks offers a sharper lens into what matters most this quarter. Image source: Weiss/Getty Images Big Tech continues hogging the spotlight, as the Magnificent 7 guides the broader market through a crucial stretch of the earnings season. The show opened with a mixed act. Google blew past expectations, posting a 14% revenue bump to $96.43 billion and $28.2 billion in net income, on the back of a 32% leap in Google Cloud. Related: Veteran analyst drops 3-word verdict on Tesla post-earnings That level of strength led management to bump its 2025 capital expenditures target to $85 billion. Tesla, meanwhile, edged past estimates on both sales ($22.5 billion) and EPS ($0.40), despite a 12% YOY decline in deliveries. The sales drop revived investor chatter over Elon Musk's AI-and-Robotaxi pivot and its long-term payoff. Nevertheless, the broader trend looks mostly intact. More than 80% of S&P 500 companies topped forecasts on both sales and profits, per FactSet. Moreover, the Mag 7 is expected to race past its peers, delivering an estimated YOY earnings growth topping 14%, compared to just 3.4% for the rest of the index. Now, the second wave begins. Apple, Amazon, Microsoft, and Meta will take the center stage this week, with high expectations. Collectively, these giants account for about 20% of the total U.S. market cap and over a third of S&P 500 earnings. Consensus estimates peg Apple's numbers at $89.1 billion in sales and $1.42 EPS. Amazon is expected to post $162 billion in sales. Also, Microsoft could deliver $73.8 billion in sales and $3.38 per share earnings, while Meta is forecast at $44.8 billion and $5.87 EPS. More News: Amazon's quiet pricing twist on tariffs stuns shoppersMicrosoft software flaw leads to shock nuclear cyber breachNvidia avoids White House crackdown; Trump softens on AI giant With a Fed decision, jobs data, and tariff decisions all looming, these earnings will likely set the tone for the stock market. AI upends Big Tech's typical Q2 slowdown Typically, Q2, spanning April through June, has been more of a reset period for Big Tech. It sits between the highs of the holiday-driven Q4 and the optimism of a fresh fiscal Q1. Hence, growth rates tend to decelerate with consumer spending cooling post-winter and enterprise tech budgets settling into the year. Related: IonQ CEO drops bold call on quantum computing's tipping point For Apple, that usually results in a softer iPhone demand after the launch season, with Mac and Services stepping in to balance the likely drop. Google and Microsoft often lead the charge with their double-digit cloud revenue sales, though Q2 typically is a slowdown from Q1's AI-fueled capex bursts. Meta, meanwhile, sees some pullback in ad budgets as marketers recalibrate, which makes cost discipline incredibly important. But the old Q2 playbook may be breaking. AI adoption has been an amazing tailwind in a historically tepid quarter. The expansion of generative AI, from foundational models to smarter analytics, continues pushing enterprise momentum. At Google Cloud and Microsoft Azure, this effectively leads to growing cloud demand and fresh rounds of server and GPU investment. For Apple, layering AI into iOS and macOS is directing more users into Services. And Meta's AI-powered ad tools are helping brands get better traction and spend more efficiently. The result is that Q2 now brings more upside potential than seasonal softness. Bank of America is leaning on a mix of tech and consumer momentum stocks ahead of a pivotal earnings season. In a fresh note, BofA analysts highlighted three standouts that could see a catalyst in the coming weeks. Moreover, the firm is betting on robust fundamentals, scalable business models, and potent growth narratives. Oddity Tech, AppLovin, and Amazon each bring something different and unique to the table. Let's break down why these three made the list. Amazon: More than AWS BofA analysts are seeing strength in Amazon's powerful retail engine heading into earnings. While AWS continues to dominate the headlines, analysts contend that the real story lies in its wider e-commerce ecosystem and juggernaut-like positioning in digital advertising and devices. The firm believes Amazon's customer-first strategy continues to pay off, especially as macro tailwinds stabilize. Also, BofA expects AWS growth to continue accelerating at the back end of the year, giving investors potentially double upside from cloud and retail. AppLovin: Software story gains traction AppLovin is also getting the love from BofA analysts, due to the expansion of its managed service onboarding and self-serve ad tools. If both take hold, EBITDA estimates for 2026 could move a lot higher. Additionally, the stock's been gaining steam in recent months, on the back of renewed faith in its AXON ad engine. With momentum building and BofA holding a Buy rating, AppLovin is shaping up as one of the more under-the-radar stories this earnings season. Oddity Tech: Online beauty with an edge Oddity Tech is a digital cosmetics player with a robust direct-to-consumer model, and BofA likes what it sees. Nearly all sales go through its own channels, giving it immense over margins, experience, and brand loyalty. Also, the firm just bumped its price target to $80 (a 17.6% jump from current prices), citing strength in Oddity's proprietary recommendation technology. With beauty trends moving fast, analysts think Oddity has room to grow even after a breathtaking start to the year. Related: Billionaire drops bold housing market reset prediction The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Bloomberg
16 minutes ago
- Bloomberg
S&P 500 Rises With EU Deal Sealed Ahead of Data, Earnings Frenzy
US equities extended their climb on Monday as a weekend trade deal with the European Union fueled optimism ahead of a jam-packed week of earnings scorecards from Big Tech, economic data and a Federal Reserve meeting. The S&P 500 Index edged up 0.1% as of 9:40 a.m. in New York, while the technology-heavy Nasdaq 100 Index rose 0.3%. In individual movers, Samsung Electronics Co. said it would produce AI semiconductors for Tesla Inc. in a $16.5 billion pact. ASML Holding 's US-listed shares climbed following the announcement.
Yahoo
43 minutes ago
- Yahoo
Is Lucid Motors Stock a Buy, Sell, or Hold for July 2025?
The recent discussion about electric vehicles (EVs) centers on industry leader Tesla (TSLA) and how new policies might slow down demand for EVs. President Donald Trump's bill would cut the $7,500 EV tax credit for the purchase of a new EV as well as the $4,000 credit for buying a used EV after September. Against this backdrop, can luxury EV maker Lucid Group (LCID) take the spotlight away from some of the big names? More News from Barchart Warren Buffett Warns Inflation Turns Business Into 'The Upside-Down World of Alice in Wonderland' But Weeds Out 'Bad Businesses' Why GOOGL Stock May Be the Market's Next Big Winner Alphabet Posts Lower Free Cash Flow and FCF Margins - Is GOOGL Stock Overvalued? Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today! About Lucid Stock Founded in 2007, Lucid Motors, officially known as Lucid Group, operates as a U.S. luxury EV and technology company. It began its operations by supplying high-performance batteries and powertrain systems but changed its position in 2016 to produce its own EVs. Lucid has a market capitalization of $8.9 billion. The company's flagship product, the Lucid Air, was launched in 2021. The EV is popular among consumers for its rapid charging capabilities, long range, and upscale interior design. In late 2024, Lucid started producing its second model, the Gravity SUV. The model combines luxury with long mileage. Lucid is backed by Saudi Arabia's Public Investment Fund (PIF), which remains its majority investor. Lucid is also looking at a potential reverse stock split. The company has filed a preliminary proxy statement for a 1-for-10 reverse stock split. While the strategy is popular among firms trying to avoid a delisting by preventing the stock price from falling below the $1 mark, Lucid does not seem to be in danger of delisting. Lucid recently secured a partnership with ride-hailing giant Uber Technologies (UBER), whereby Uber is set to invest $300 million in Lucid. Uber will also invest in autonomous technology startup Nuro, which is set to equip Lucid vehicles with self-driving capabilities. Uber aims to deploy approximately 20,000 Lucid vehicles equipped with Nuro Driver over a six-year period. Lucid investors celebrated this multi-year deal, which led to LCID stock surging. Over the past month alone, Lucid shares have gained 36%. However, over the past 52 weeks, the stock is still down by nearly 16%. LCID currently trades 34% lower than its 52-week high of $4.43. Currently, Lucid trades at an eye-watering valuation. Its price-to-sales ratio sits at 11 times, which is significantly higher compared to the industry average. Lucid's Q1 Results Were Lower Than Expected On May 6, Lucid reported its first-quarter results for 2025. During the quarter, revenue climbed 36% from the prior-year period to $235.05 million. At the heart of this growth was Lucid delivering 3,109 vehicles in Q1, representing a 58.1% year-over-year (YOY) increase. The company produced 2,212 vehicles during the quarter, which excludes over 600 vehicles in transit to Saudi Arabia for factory gating. While production and deliveries are growing, so are costs. The company continues to post significant losses. In Q1, its net loss per share stood at $0.24. While this was lower than the $0.30 per share net loss in Q1 2024, it was wider than the $0.23 per share net loss that analysts had expected. Lucid ended the quarter with about $5.76 billion in total liquidity. Lucid is still aiming for a huge expansion in deliveries. At the current rate, it's on track to deliver 12,500 vehicles, which is robustly higher than the number it delivered last year. Even with the fear of tariffs looming large, the company aims to produce approximately 20,000 vehicles this year, which is roughly double what it produced in 2024. While analysts expect Lucid to continue posting losses, they anticipate that these losses will narrow. In Q2, Lucid is projected to post a loss per share of $0.22, narrowing by 24% YOY. For the current year, the company's loss per share is expected to be $0.89, reflecting an improvement of 29% YOY. What Do Analysts Think About Lucid Stock? Wall Street analysts are tepid on LCID stock at the moment. Analysts at Cantor Fitzgerald reiterated their 'Neutral' rating on LCID with a $3 price target. This was predicated upon Lucid's Q2 production and delivery numbers falling short of Cantor Fitzgerald's estimates while showing improvements YOY. On the other hand, Baird analyst Ben Kallo raised the price target on Lucid Group from $2 to $3 while maintaining a 'Neutral' rating. The price target was upgraded after Lucid reaffirmed its intention to launch its midsize platform next year, indicating potential models. Morgan Stanley also sees opportunity in Lucid's partnership with Uber. Analysts at the firm reiterated their 'Equal Weight' rating and $3 price target on the stock. Wall Street analysts have a mixed view about Lucid, giving it a consensus 'Hold' rating overall. Of the 13 analysts rating the stock, two analysts rate it a 'Strong Buy,' a majority of nine analysts play it safe with a 'Hold' rating, one analyst provides a 'Moderate Sell' rating, and one analyst recommends 'Strong Sell.' The consensus price target of $2.86 represents 2% downside potential from current levels. Key Takeaways While the multi-year partnership with Uber creates a chance of generating a revenue stream for the foreseeable future, the effects of the absence of tax credits on this luxury EV maker and a reverse stock split must also be taken into account. Hence, it might be wise to observe LCID stock from the sidelines for now. On the date of publication, Anushka Dutta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
