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CNBC
3 days ago
- Business
- CNBC
This stock literally powering AI is setting up for a run to record levels, according to the charts
For this week's column, I was planning to do a simple analysis of the Nasdaq-100 showing a holding pattern that's been in place since May 13. Upon the completion of this consolidation, we should resolve to the upside testing the all-time highs — despite all the lingering macro headwinds. But when I learned about Meta Platforms signing a nuclear power deal with Constellation Energy , I decided to focus on the companies literally powering this revolution in artificial intelligence. I don't hold Constellation Energy, but I do own Oklo , GE Vernova , and Vistra in our Tactical Alpha Growth (T.A.G.) portfolio at Inside Edge Capital . As the AI buildout powers ahead, this will be one of the key drivers to break QQQ from the three-week consolidation setting up all-time highs. Today we're going to focus on Vistra Corp (VST), a stock that I also hold in our "fast money" account Active Opps with a 3.6% weighting. Based on today's news, many of the power generation and equipment suppliers are trading higher along with the semiconductors. I will increase my position size in VST to approximately 5% of my holdings in Active Opps based on the tactics I outline below. But first, let's talk about the company. Vistra is an integrated power generation and retail electricity company that has positioned itself in a pivotal role to support the AI technology buildout by filling the significant energy demands of AI-driven data centers. In 2024, Vistra acquired Energy Harbor for $3.4 billion — adding four nuclear power plants to its portfolio. Vistra has also made investments in natural gas assets as well as solar facilities, which allowed them to enter into power purchase agreements (PPA's) with Amazon and Microsoft. VST has grown revenue consistently since 2021 and GAAP EPS aggressively, until this year where analysts see a 11.79% contraction. Non-GAAP EPS is showing growth rates since 2022 of 378%, 88%, 54% and 43% according to S & P Global Capital IQ. The weekly chart shows nearby resistance in the $172-$177 zone. I would feel better increasing my position size if we can get a daily close above $180 setting up a test of all-time highs just below $200. Turning to the daily chart, we see a gap up today into our resistance zone following the Constellation-Meta news. If we can get a move into $180 this week, I will be looking to add to my position and consider the pivot point that is now support at $165 as my risk containment level. We offer active portfolio management and regular subscriber updates like the idea presented above. -Todd Gordon, Founder of Inside Edge Capital, LLC DISCLOSURES: Gordon owns VST personally and in his wealth management company Inside Edge Capital. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
CNBC
20-05-2025
- Business
- CNBC
Spotify is gearing up for a move to fresh record highs, according to the charts
We last wrote about Spotify on Oct. 22 just before the stock broke to all-time highs. SPOT is higher by about 75% since then, and we see the technicals and fundamentals of the stock as constructive. We're gearing up to add to our position here. In October, we observed the chart consolidating below the 2021 highs of $389, anticipating a move to record levels. Last year was significant for the company. as it swung from a GAAP four-quarter loss in the prior year to a profit. Looking ahead to 2026, analysts are looking for 85.66% growth to $10.57 per share. Despite the broader market volatility in 2025 from tariffs and a credit downgrade, SPOT continues to show incredible relative strength and is simply consolidating at the range highs around $660. We are targeting a move to Fibonacci projection resistance shown in blue at $860 in 2025. Moving down to the daily chart, we see price action in 2025 that includes two volatile drops below $500. However, the buyers snapped up this name pushing right back towards all-time highs amid the bumpy and volatile trade of the year. First-quarter results missed analyst expectations, but a dive into the quarterly financials show the miss was driven by greater expenses tied to payroll taxes associated with employee salaries and benefits. The results were also impacted by a shift in the timing of equity grants from Q1 to Q2. These are likely to have a temporary impact on the bottom line — while the long-term growth story streams ahead. This indicates there is an underlying strength to the company, despite the 62 times 2025 earnings valuation ($660 / $10.57 GAAP) earnings. Looking out to 2026, however the valuation is a bit more reasonable at 50 times earnings for a company that is consistently growing top line revenues — and is maximizing bottom line earnings by efficiently using capital. In Q1, Spotify demonstrated improved margins generating $534 million in free cash flow, 158% Y/Y growth, and 17.7% return on invested capital (ROIC). At the heart of this growth story is a steady increase in monthly active users, as well as investment in AI-driven features to power individualized content for users. At the end of 2024, Spotify launched its Spotify Partner Program to incentive creators to come to the platform and share revenues aiming to compete with YouTube. Considering the major jump Spotify has with podcasts, I expect them to pursue this aggressively while Google is coming under attack from multiple angles. In our Active Opps portfolio, we hold a 5.12% allocation. After publishing this article I'm going to increase the holding up to around 7% of the portfolio. -Todd Gordon, founder of Inside Edge Capital, LLC DISCLOSURES: Gordon owns SPOT personally and in his wealth management company Inside Edge Capital. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
CNBC
13-05-2025
- Business
- CNBC
This e-commerce stock has formed an inverse 'head-and-shoulder' pattern signaling more gains ahead
Shopify is the one-stop shop to help small- and medium-size businesses transact online. There was an explosion in new online business formations during Covid, and the number of new monthly business applications has maintained. However, the company is starting to diversify by onboarding larger brands such as Reebok, Overstock and Barnes & Noble, which will stabilize revenue streams. We just added SHOP to our Active Opportunities portfolio on Monday and see upside ahead. Starting on the weekly chart we see a sharp decline following the pandemic as entrepreneurs rushed to open their virtual stores as we were forced home. Since then, the stock has recovered in a rhythmical uptrend defined by the dashed parallel trend channel. The all-time high of $176 could be in reach. Moving down to the daily chart, we see an inverse head and shoulder pattern forming (3 curved blue lines) setting up a breakout of the downtrend resistance line. There was an accompanying explosion in volume with 2, 30M+ share days compared to the average daily volume of 12.8 million. This was driven by an earnings report and a surprise announcement that SHOP would be added to the Nasdaq-100 index. SHOP reported earnings last week with 26.8% revenue growth vs same quarter last year. Non-GAAP earnings showed 25% growth from the year-earlier period. On a GAAP basis, though, the company reported a loss. Diving into that a bit, the company reported that it lost about $1.04 billion in unspecified equity investments and does not reflect Shopify's core business operations. Watching the price action, the stock opened down on May 8 following earnings and then closed in the top end of the range. Friday was an inside day (vs Thursday) and following the news of a U.S.-China trade deal, shares surged more than 10%. The company has minimal exposure to the Chinese tariff situation, but the merchants on the platform certainly do. I didn't love buying a stock on such a big up day, but I think the resistance level was $100.60, which is now broken acting as support. Let's see if the stock can move higher, though I fully acknowledge the hefty forward valuation the company faces. Looking back up at the weekly chart on the lower panel, we see steady top line revenue growth figures above 20% since 2019 and going forward into 2026. EPS is expected to dip in 2025 to 34 cents (this is GAAP earnings) but re-accelerate in 2026. Non-GAAP 2026 earnings are expected at $1.41, equating to 76 times forward earnings. The company needs to grow into this valuation with increased earnings expectations by expanding their multiple offerings. -Todd Gordon, founder of Inside Edge Capital, LLC DISCLOSURES: Gordon owns SHOP in his wealth management company Inside Edge Capital, LLC. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
CNBC
06-05-2025
- Business
- CNBC
This cloud stock could break above a 3-year resistance level, charts show
We just added Okta to our "fast money" model at Inside Edge Capital ahead of a possible three-year technical resistance breakout, as the company is projected to also reach fundamental profitability this year. OKTA is a leader in the identity and access management (IAM) space. It offers products to secure access within cloud services and remote work, a trend that we now know is not going away. The company is investing in AI to enhance its offerings that safeguard generative AI systems and non-human identities. Specifically, OKTA announced capabilities to help businesses incorporate AI agents and other "non-human identities," or NHIs. Research from Deloitte forecasts that by 2027, 50% of companies using AI will also be using generative AI agents in some way. The company recently got a boost on news it would be added to the S & P 400 midcap index, sending the stock higher by 7%. That put it within reach of the three-year price ceiling around the $115 level. This resistance level has bested the stock 3 times. But in addition to being added to the midcap index, analyst now expect a sharp turnaround in earnings, signaling it might be time to buy. This stock also has an additional tailwind being part of the "Software & Services" group that has several cutting edge companies brining additional addition to these names. In the Active Opps portfolio at Inside Edge Capital, I'm holding a pretty sizable 5.26% allocation from $112.88. Should the broader market stabilize and push through the daily moving averages, I would look to increase my size to around 7% if we get a break through the $115 resistance level and trail stop losses to my original entry price. -Todd Gordon, Founder of Inside Edge Capital, LLC DISCLOSURES: Gordon owns OKTA in his wealth management company Inside Edge Capital, LLC All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
CNBC
29-04-2025
- Business
- CNBC
Charts point to a bullish set-up on Apple ahead of earnings
We're in the heart of earnings season here with some of the biggest tech names set to report this week. The biggest name set to report earnings this week — Apple — has a few factors working I believe justifies playing the stock on the upside. First we'll hit the technicals and next we'll look at the fundamentals. To start, let's examine the decade-long weekly chart for AAPL . The purple dotted line is the 200-week moving average and it's very obvious to see that it defended the bullish trend in 3 highlighted areas. In the latest volatility swoon (blue indicator below the chart), price attempted to break below the 200-week moving average but buyers defended and we closed above it on that week. The long-term bull trend is intact. Moving down to the daily chart, we see the price poking its head above the red parallel channel resistance level following the April tariff storm. This is bullish as we head into Thursday's earnings. Just above us and possibly during earnings we'll have the daily 50 and 200 day moving averages to contend with which will be part of the story as we construct a stock / option combo play for earnings. I hold Apple in both my dividend and growth portfolios at Inside Edge Capital, but I'm also looking to add the following trade in my shorter-term model Active Opps (Active Opportunities). I'm planning to buy the stock here, but also sell May 2nd $220 calls against it that are trading for $1.35. It's tough to be outright bullish here so I'm looking to cap upside with a call sale, but reduce my average price with that call sale buffer. A quick calculation shows us that the $212 stock price divided by the $1.35 premium received is a monthly yield of 0.636%, which is annualized is 7.9% if you do this every month. I don't do this every month, but I feel it's appropriate in this market that 'feels' like it wants to probe higher, but not break out into a clear trend without some tariff clarity. The fundamentals Turning to the fundamentals I found that of the major companies reporting this week, Apple has the most international sales exposure. The US dollar has been in a massive decline since the first week of the year (approximately 6.3%, which is large for the FX market), which should boost earnings brought back to the US. Citigroup showed an earnings boost from FX tailwinds via a weaker USD, and conversely, Spotify, a Luxembourg-based company, reports earnings in euros and the stronger euro had a significant negative impact on SPOT's earnings. Beyond the foreign exchange markets, we are looking for a pull ahead impact of sales as tariffs that were not in effect for Apple's 2nd quarter, will be in effect in coming quarters. The iPhone 16 super cycle never really took effect as AI was introduced into the phone in a bit of a prolonged rollout period, but I have to think holdouts pulled the trigger on the 16. Finally, I think that any negative parts of the earnings report, specifically with challenges in China may be given a pass as Apple is proactively diversifying their supply chains from China to India and Brazil. I think Apple has a decent shot at challenging that cluster of daily moving averages following earnings after breaking daily chart support and holding the mega 200-week moving average. -Todd Gordon, Founder of Inside Edge Capital, LLC (DISCLOSURES: Gordon owns AAPL in his wealth management company Inside Edge Capital, LLC. Charts shown are Schwab's ThinkorSwim) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
