Latest news with #BenReitzes
CNBC
a day ago
- Science
- CNBC
Microsoft's software business has a tailwind in AI, says Melius' Ben Reitzes
Ben Reitzes, Melius Research head of technology research, joins 'Closing Bell: Overtime' to discuss software AI's reality check, names he's likes in the space and more.
Yahoo
a day ago
- Business
- Yahoo
Melius Raises Apple (AAPL) PT to $260, Cites Upcoming iPhone Cycles
Apple Inc. (NASDAQ:AAPL) is one of the 10 AI Stocks Making Waves on Wall Street. On August 8, Melius analyst Ben Reitzes raised the price target on the stock to $260.00 (from $240.00) while maintaining a Buy rating. The firm is optimistic about the upcoming iPhone product cycles. It also believes that Siri AI concerns are overblown. 'Apple's stock has reacted nicely to tariff news, but we see focus starting to move toward new products and systematic increases in value for iPhones that drives growth for the next 3+ years. We raise our FY26 EPS estimate 12 cents due to higher gross margins and modestly raise FY27 EPS. Our target adjusts to $260, and we think concerns about the Siri delay are overblown since Apple isn't losing share. Reiterate Buy.' Melius is optimistic that a new iPhone product cycle starting in September will likely improve product mix. This will in turn boost growth in high single digits during some quarters. 'We are optimistic that our iPhone estimates can be conservative based on new product cycles that include an 'iPhone Air' this September, a foldable model in FY26 and the iPhone 20 line-up in late FY27 (20th year anniversary models). Luckily for Apple, its iPhone base doesn't seem to care about the Siri/AI delays, and we see no evidence of real switching.' With more iPhone catalysts, expensive models such as foldables will likely help increase total revenue. 'The iPhone has more catalysts in 2026 with the introduction of a foldable model that should be priced around $2,000 and then the iPhone 20 ('20th anniversary') cycle in 2027. As foldables 'mix in' there can be big revenue growth even on flat units.' Apple is a technology company known for its consumer electronics, software, and services. While we acknowledge the potential of AAPL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and Disclosure: None. Sign in to access your portfolio
Yahoo
2 days ago
- Business
- Yahoo
After Hitting 30th 52-Week Low, Is Adobe Too Cheap to Ignore?
The last time Adobe (ADBE) traded this low was in May 2023, 27 months ago. In that time, Nvidia's (NVDA) stock has gained 546%. The shine has certainly worn off for the maker of creative software programs like Photoshop and Acrobat. While the company's business model has successfully transitioned to cloud-based subscriptions that utilize AI to serve creative professionals, investors have become skeptical about its future growth, resulting in a significant erosion of market value over the past 12 months. More News from Barchart Is Ford Stock's Juicy Dividend Still Safe Amid the Global Tariff War? Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! At first glance, Adobe appears to be too cheap to ignore. However, markets often get it right about the future potential of a company's products and services. With Barchart's Technical Opinion screaming 'Strong Sell,' it might not be the best value play right now. Here's my two cents on the pros and cons of buying Adobe stock at 52-week lows. It's Unwise to Catch a Falling Knife The Adobe chart for the past three months is not a pretty picture. Its shares have lost 14% of their value, and the decline has been almost consistently on a slow march lower. Momentum is down, not up. It's been a while since I've paid close attention to the state of Adobe's business, so I need to take a closer look at the issues plaguing it right now. On Tuesday, Barchart contributor Aditya Sarawgi discussed whether the outlook for Adobe stock was bullish or bearish. The answer based on the chart above would seem obvious. However, there remain some optimistic data points working in Adobe's favor. I'll get to those in the next section. In the meantime, my colleague pointed out that a troubling aspect of Adobe's growth has cropped up from the company's RPOs (remaining performance obligations). They were $19.69 billion at the end of Q1 2025, below analyst expectations. They were the same $19.69 billion at the end of Q2 2025. Analysts are concerned that the company's AI tools rolled out over the past 12-24 months aren't the moneymakers that Adobe claims them to be. That's a debate that remains open to debate, especially given the other products in the market it competes with, such as Canva's Image Generator. Barron's reported on Monday that Melius Research analyst Ben Reitzes downgraded Adobe stock to Sell from Hold while cutting his target price by $90 to $310, below its current share price. 'He [Reitzes] believes that as AI continues to evolve, software players are at risk of losing out to companies that create the infrastructure to power autonomous agents, or agents that execute software tasks automatically,' Barron's contributor Angela Palumbo wrote. ''It can get worse for SaaS [software as a service] players like Adobe, Salesforce, Workday etc. — and see value continuing to shift toward infrastructure winners like Microsoft and Oracle,' Reitzes said.' That's a possibility that investors have taken to heart. Hence, the 30th new 52-week low. The Glass Is Half Full at Adobe There remains a lot to like about Adobe, especially at its lower valuation. For example, in mid-June, when the company released its Q2 2025 results, it raised its full-year guidance for revenue and earnings. On the top line, it now expects revenue of $23.55 billion at the midpoint of its guidance, up from $23.45 billion previously, the same number as Wall Street. On the bottom line, it expects earnings per share of $20.60, up from $20.35 previously, and 21 cents higher than analyst expectations. As a result of its falling share price, it now trades at 16.7 times its current share price of $345. According to S&P Global Market Intelligence, that's the lowest multiple in the past decade. Investors are facing a better risk/reward proposition than they've faced in a very long time. The last time its shares were at this level was in May 2023. At that time, its shares were valued at nearly 25 times its projected earnings per share. So, even though its earnings on a per-share basis in 2025 are expected to be roughly double what they were in 2023 -- $11.82 a share -- investors at the time were willing to pay 50% more for those lower earnings. Adobe's revenue growth in 2023 was 10.2%, just 120 basis points higher than the projected earnings in 2025. Is 120 basis points of extra growth worth a 50% premium? That's a big no. While the company's net debt of $868 million is significantly higher than the $3.76 billion in net cash on its balance sheet at the end of fiscal 2023 (November year-end), its total debt of $6.58 billion as of May 30 was still just 0.7 times its $8.88 billion in EBITDA (earnings before interest, taxes, depreciation and amortization). The Bottom Line on Adobe Stock If you're like me and believe that large-cap stocks are overvalued -- according to Yardeni Research, the forward P/E ratio for large-cap stocks is 22.1x, while the Magnificent Seven forward P/E is 29.5x -- one could make the argument that Adobe stock is most definitely undervalued. That's not to say that investors aren't right to be skeptical of the company's future growth. However, given that 25 of 35 analysts still believe ADBE stock is a Buy (4.26 out of 5), it trades at just 16.7 times its 2025 earnings per share, and there is plenty of options volume to lay down a bet that Adobe is undervalued at current prices, I say it is too cheap to ignore especially if you are an aggressive, risk-tolerant investor. I like Adobe stock at current prices. On the date of publication, Will Ashworth 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
Globe and Mail
6 days ago
- Business
- Globe and Mail
Why Shares of Apple Are Surging Today
Key Points Earlier this week, Apple announced a $600 billion investment in the U.S. That seemed to lower tensions between the company and President Donald Trump. One Wall Street analyst views the event as positive and raised his price target on the stock. 10 stocks we like better than Apple › Shares of Apple (NASDAQ: AAPL) traded nearly 4.3% higher as of 2:35 p.m. ET today. Analysts are more optimistic that the company has squashed some of the tariff drama with President Donald Trump's administration. Investing $600 billion in America will pay off for shareholders Many large tech companies have been in the crosshairs of the Trump administration, which seeks to bring more manufacturing back to the U.S. Trump recently announced that he would slap a 100% tariff on semiconductor imports unless companies are building or investing in the U.S. Earlier this week, Apple, which is one of the hardest-hit large tech companies by tariffs, announced a $600 billion U.S. investment. While it sounds costly, it's the better alternative to higher tariffs, Melius Research analyst Ben Reitzes wrote in a note today. Reitzes also reiterated a buy rating on the stock and raised his price target by $20 to $260. "It relieves Apple from paying incremental tariffs on U.S.-bound iPhones from India," Reitzes said, adding that a stronger iPhone production cycle could begin in the fall. "We are going to take a risk here and raise our target and our numbers, taking out a huge portion of our tariff hits." One problem potentially solved Apple's stock has struggled this year because of how much of the company's production is abroad in China, India, and Vietnam. Even after the big run this week, shares are still down about 5.5% on the year. The company has also struggled to convince investors that it has a strong road map in place for artificial intelligence. While that challenge remains, removing some of the tariff overhang is certainly a big step in the right direction and allows the company to focus more on its core business. Should you invest $1,000 in Apple right now? Before you buy stock in Apple, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Apple wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,563!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,108,033!* Now, it's worth noting Stock Advisor's total average return is 1,047% — a market-crushing outperformance compared to 181% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025
Yahoo
29-07-2025
- Business
- Yahoo
These Analysts Want You to Buy the Dip in IBM Stock
International Business Machines (IBM) stock tumbled more than 7% on Thursday, July 24 following second-quarter earnings results that beat Wall Street expectations, prompting several analysts to view the decline as an overreaction and a compelling buying opportunity despite investor concerns about the consulting business and macro uncertainties. In Q2 2025, IBM reported revenue of $17 billion, above consensus estimates of $16.6 billion, while adjusted earnings per share stood at $2.80, above estimates of $2.64. However, software sales of $7.39 billion fell short of the $7.43 billion consensus, likely contributing to the stock's weakness despite the overall revenue beat. More News from Barchart Tesla Just Signed a Chip Supply Deal with Samsung. What Does That Mean for TSLA Stock? Dear Microsoft Stock Fans, Mark Your Calendars for Aug. 1 Is Lucid Motors Stock a Buy, Sell, or Hold for July 2025? Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! Analysts Remain Bullish on IBM Stock Melius Research analysts, led by Ben Reitzes, called the stock drop too severe, given IBM's positioning in what they see as a major mainframe cycle. The analysts highlighted 'momentum' for IBM's new z17 mainframe system and noted benefits from currency tailwinds, as well as prospects for transaction processing to recover. 'We are buyers on weakness since IBM is still entering a big mainframe cycle, software is set to accelerate from here with help from Red Hat and Automation,' the Melius team said, adding they see earnings upside in the coming years. The analysts view Red Hat as 'the business that is most important to IBM's long-term multiple,' citing the hybrid cloud provider's 16% growth acceleration in the quarter, up from 12% in the first quarter. They also expressed optimism about IBM's prospects in quantum computing and the potential for the z17 mainframe to drive organic growth above the company's 5% constant-currency target. Wedbush analysts led by Dan Ives maintained an 'Outperform' rating and $325 price target, stating they 'would be buyers of any knee-jerk weakness.' The firm believes IBM is 'well-positioned to capitalize on the current demand shift for hybrid and artificial-intelligence applications with more enterprises looking to implement AI for productivity gains.' Even Bank of America, which lowered its price target from $320 to $310, reiterated its 'Buy' rating on the stock. The analysts described IBM as a 'show me story' on software performance in the second half while remaining 'bullish on overall company trajectory,' expecting estimates to move higher with increasing contribution from high-margin software. During the earnings call, CEO Arvind Krishna expressed optimism about the macroeconomic environment, highlighting strong global technology adoption. He noted that enterprises worldwide are convinced that technology forms the basis for scaling revenue while controlling capital and labor expenses. IBM demonstrated strong momentum in its hybrid cloud and AI strategy, with its GenAI book of business reaching $7.5 billion in inception-to-date sales. Management raised productivity savings targets and increased free cash flow guidance while maintaining confidence in accelerating revenue growth for the full year. IBM's consulting business, while facing near-term headwinds from delayed decision-making and discretionary project cuts, showed encouraging signs with a healthy $32 billion backlog. Krishna noted improved M&A prospects under what he called a 'rational regulation environment,' suggesting potential for strategic acquisitions. The analysts' bullish stance reflects confidence that IBM's portfolio strength, mainframe cycle momentum, and accelerating AI adoption among enterprise clients will drive sustainable growth despite current market volatility. Is IBM Stock Undervalued Right Now? Analysts tracking IBM stock forecast its free cash flow to improve from $12.75 billion in 2024 to $18.21 billion in 2029. Today, IBM stock trades at a forward FCF multiple of 16.6x, which is higher than its 10-year average of 11.6x. Given, an estimated annual FCF growth rate of 7.4% and the tech stock's dividend yield of 2.6%, the tech giant could be priced at 17x forward FCF. This would mean IBM's market cap could surpass $300 billion in the next three years, indicating upside potential of 25% from current levels. If we adjust for dividend reinvestments, cumulative returns would be closer to 35%. Out of the 21 analysts covering IBM stock, eight recommend 'Strong Buy,' one recommends 'Moderate Buy,' 10 recommend 'Hold,' and two recommend 'Strong Sell.' The average target price for IBM is $269, 2% above the current price. On the date of publication, Aditya Raghunath 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
