Latest news with #DubravkoLakosBujas
Yahoo
23-07-2025
- Business
- Yahoo
Why JPMorgan says it's getting riskier to hold the market's most popular stocks
JPMorgan is urging investors to use caution when piling into the market's hottest stocks. The bank recently said certain "high beta" stocks are overcrowded. Analysts said there have been several notable instances of crowding in markets this year. With the stock market notching fresh records weekly, it's easy for investors to get excited, but JPMorgan is warning that some of the market's most popular high-growth stocks are looking risky. In a note to clients this week, Dubravko Lakos-Bujas and his team discussed what they described as "extreme crowding episodes" for investors. As they see it, crowding in the market—they flag three notable instances of overcrowding this year—has led to heightened risk, even as stocks continue to rise. The moves, they say, look unsustainable. While the stock market is at records, Lakos-Bujas said that crowding is also nearing record levels, as investors pile into certain high beta stocks. High beta stocks are those that see outsize moves relative to the broader market, offering bigger gains when the market is up but also more pain during declines. The analysts provided a high beta stocks screen with a list of companies with especially high beta scores. Super Micro Computer, a tech stock at the edge of the AI trade with high interest from short sellers, topped the rankings with a beta score of 3.37. Just behind it on JPMorgan's lists are Coinbase Global and Palantir Technologies, two of the tech sector's most popular high-growth stocks. Coinbase has surged recently on momentum from pro-crypto legislation, and Palantir has benefitted from government contracts, as well as enthusiasm for AI. Leading AI chipmakers Nvidia and Broadcom are also among the highest beta stocks. "We believe the current 100%ile crowding based on our quantitative analysis not only presents a risk for this crowded segment, but is also a red flag for the broader market implying there is rising complacency in the short term," the report said. They added that the speed at which the crowding has accelerated is "particularly unsustainable," and marks the fast acceleration in overcrowding in 30 years. "We would fade this rally in High Beta stocks as it is not supported by a bust-to-boom recovery in the business cycle/fundamentals or significant easing in monetary/fiscal policies to sustain this outperformance over multiple quarters." Read the original article on Business Insider Melden Sie sich an, um Ihr Portfolio aufzurufen.
Yahoo
22-07-2025
- Business
- Yahoo
PLTR Stock Warning: This Analyst Says Palantir Is ‘Too Crowded.' Here's Why.
Palantir (PLTR) shares are falling in morning trading Tuesday after a senior JPMorgan strategist issued a bearish note on the data analytics firm. According to Dubravko Lakos-Bujas, the Denver-headquartered firm runs the risk of steep decline in the second half of 2025 as it's a high-beta, momentum-driven name that's super 'overcrowded' at writing. More News from Barchart Opendoor Stock Is Surging Higher in a Frenzied Retail Rally. How Should You Play OPEN Shares Here? This Penny Stock Wants to Become the MicroStrategy of Dogecoin Robinhood Stock Stumbles as S&P 500 Inclusion Is Once Again Off the Table for HOOD Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! Palantir stock has been in a sharp uptrend over the past three months and is currently up more than 100% versus its April low. What Overcrowding Means for Palantir Stock In his research note, Lakos-Bujas said positioning in PLTR shares has soared from 25th percentile to the 100th percentile within three months only, the fastest increase in about 30 years. This 'extreme crowding' suggests nearly everyone who wants to own the stock already does. In such cases, even minor negative news can trigger a sharp selloff, as there's little fresh buying to support prices. Combined with sky-high valuation (well over 400x forward earnings), Palantir stock looks highly vulnerable to momentum reversal and profit-taking at current levels. In short, shares of the AI-enabled software giant are priced for perfection, and perfection rarely lasts. PLTR Shares Are Disconnected From Fundamentals Financially, the data analytics company is doing rather well, with estimates for per-share earnings pegged at $0.08 a share for the current quarter, indicating well over 150% growth on a year-over-year basis. Still, the JPMorgan strategist sees PLTR stock's valuation as disconnected from fundamentals as it has gone a bit too far. According to him, investors should consider pulling out of Palantir shares following its meteoric run as 'it's not supported by bust-to-boom recovery in business cycle/fundamentals or significant easing in monetary/fiscal policies.' Therefore, the AI stock will likely fail at sustaining its outperformance over multiple quarters, he concluded. Wall Street Recommends Caution in Buying Palantir Other Wall Street analysts, much like Dubravko Lakos-Bujas, recommend caution in buying PLTR shares at current levels. According to Barchart, the consensus rating on Palantir stock currently sits at 'Hold' only with the mean target of about $107 indicating potential downside of as much as 30% from here. On the date of publication, Wajeeh Khan 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
Yahoo
21-07-2025
- Business
- Yahoo
AI and momentum trades are getting too crowded, blue chips may be the way to go: JPMorgan
The most speculative corners of the market may be getting too popular, too fast. In a research note published Monday, JPMorgan warned that the rush into high-beta, momentum-driven stocks such as Palantir (PLTR), Coinbase (COIN), and Nvidia (NVDA) has reached "100th percentile" levels of crowding, the most extreme positioning in 30 years. The crowding "not only presents a risk for this segment, but is also a red flag for the broader market, implying there is rising complacency in the short term," strategist Dubravko Lakos-Bujas wrote. Investors may be overly confident that the AI-fueled rally has more room to run, with names like Tesla (TSLA) trading at over 160x forward P/E, compared to around 22x for the S&P 500 (^GSPC). The high-beta crowding, which includes low-value and speculative growth stocks, is happening rapidly. Positioning surged from the 25th to the 100th percentile in three months, the fastest climb since the firm began tracking the data three decades ago. JPMorgan notes that short interest has also dropped sharply, meaning fewer investors are hedging against downside risks. It's the "third-extreme overcrowding" episode this year, according to the firm. In January, investors piled into AI-linked megacaps. In April, they sought safety in low-volatility names amid concerns about tariffs. Now, the hot money is chasing speculative tech and meme-adjacent plays, leaving the market more vulnerable to a pullback. Read more: How to protect your money during turmoil, stock market volatility When April's low-volatility crowding began to unwind, it did so within three months, the fastest unwind on record. Following this reset, Lakos-Bujas' team recommends getting back into lower-volatility names that have lagged the broader market. Their blue chip stock picks have underperformed the market by 19% since April but may be poised to outperform if speculative bets start to unwind. "Low vol once again presents an attractive risk/reward, especially with looming tariff deadlines (Aug. 1), adverse seasonality, and aggressive investor positioning," Lakos-Bujas wrote. Top picks in the group include Coca Cola (KO), Allegion (ALLE), Intercontinental Exchange (ICE), CME Group (CME), and CBOE Global Markets (CBOE). Now may be the time to rotate back into safety, per the note. Investors may be buying into a "Goldilocks" scenario of solid economic growth, falling inflation, and a more dovish Fed. But JPMorgan sees that optimism as fragile, and crowded AI trades could be subject to quick reversals. And risky stocks that are not linked to AI are at even higher risk of reversal, the firm added. The view is gaining traction elsewhere on Wall Street. Apollo Global Management chief economist Torsten Sløk is also sounding the alarm. (Disclosure: Yahoo Finance is owned by Apollo Global Management.) In a research note last week, Sløk pointed to internal data showing that the P/E ratios of the 10 largest companies in the S&P 500, many of them AI standouts like Meta (META) and Nvidia, have surpassed levels seen at the height of the 1999 dot-com bubble. "Yes, AI will do incredible things for all of us," Sløk said on Yahoo Finance's Opening Bid. "But does that mean I should be buying tech companies at any valuation?" Sløk's response increasingly veered toward no. Francisco Velasquez is a Reporter at Yahoo Finance. He can be reached on LinkedIn and X, or via email at 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
Yahoo
21-07-2025
- Business
- Yahoo
AI and momentum trades are getting too crowded, blue chips may be the way to go: JPMorgan
The most speculative corners of the market may be getting too popular, too fast. In a research note published Monday, JPMorgan warned that the rush into high-beta, momentum-driven stocks such as Palantir (PLTR), Coinbase (COIN), and Nvidia (NVDA) has reached "100th percentile" levels of crowding, the most extreme positioning in 30 years. The crowding "not only presents a risk for this segment, but is also a red flag for the broader market, implying there is rising complacency in the short term," strategist Dubravko Lakos-Bujas wrote. Investors may be overly confident that the AI-fueled rally has more room to run, with names like Tesla (TSLA) trading at over 160x forward P/E, compared to around 22x for the S&P 500 (^GSPC). The high-beta crowding, which includes low-value and speculative growth stocks, is happening rapidly. Positioning surged from the 25th to the 100th percentile in three months, the fastest climb since the firm began tracking the data three decades ago. JPMorgan notes that short interest has also dropped sharply, meaning fewer investors are hedging against downside risks. It's the "third-extreme overcrowding" episode this year, according to the firm. In January, investors piled into AI-linked megacaps. In April, they sought safety in low-volatility names amid concerns about tariffs. Now, the hot money is chasing speculative tech and meme-adjacent plays, leaving the market more vulnerable to a pullback. Read more: How to protect your money during turmoil, stock market volatility When April's low-volatility crowding began to unwind, it did so within three months, the fastest unwind on record. Following this reset, Lakos-Bujas' team recommends getting back into lower-volatility names that have lagged the broader market. Their blue chip stock picks have underperformed the market by 19% since April but may be poised to outperform if speculative bets start to unwind. "Low vol once again presents an attractive risk/reward, especially with looming tariff deadlines (Aug. 1), adverse seasonality, and aggressive investor positioning," Lakos-Bujas wrote. Top picks in the group include Coca Cola (KO), Allegion (ALLE), Intercontinental Exchange (ICE), CME Group (CME), and CBOE Global Markets (CBOE). Now may be the time to rotate back into safety, per the note. Investors may be buying into a "Goldilocks" scenario of solid economic growth, falling inflation, and a more dovish Fed. But JPMorgan sees that optimism as fragile, and crowded AI trades could be subject to quick reversals. And risky stocks that are not linked to AI are at even higher risk of reversal, the firm added. The view is gaining traction elsewhere on Wall Street. Apollo Global Management chief economist Torsten Sløk is also sounding the alarm. (Disclosure: Yahoo Finance is owned by Apollo Global Management.) In a research note last week, Sløk pointed to internal data showing that the P/E ratios of the 10 largest companies in the S&P 500, many of them AI standouts like Meta (META) and Nvidia, have surpassed levels seen at the height of the 1999 dot-com bubble. "Yes, AI will do incredible things for all of us," Sløk said on Yahoo Finance's Opening Bid. "But does that mean I should be buying tech companies at any valuation?" Sløk's response increasingly veered toward no. Francisco Velasquez is a Reporter at Yahoo Finance. He can be reached on LinkedIn and X, or via email at 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
Bloomberg
06-06-2025
- Business
- Bloomberg
JPMorgan U-Turns on Stock Market, Now Sees Slight Gain for 2025
JPMorgan Chase & Co. is the latest Wall Street firm to pull an about-face on the US stock market, raising its S&P 500 Index target as equities continue to climb despite ongoing uncertainty about President Donald Trump's trade policies. The bank's top equity strategist, Dubravko Lakos-Bujas, had predicted the US stock benchmark would end 2025 at 5,200 back in April during the throes of tariff volatility. But he now sees it closing the year at 6,000, which is a less than 1% gain from where the S&P 500 finished Thursday following a double-digit rally since its April 8 low. But it's still downright optimistic compared to his previous expectation.
