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Globe and Mail
4 days ago
- Business
- Globe and Mail
3 Leading Tech Stocks to Buy in the Second Half of 2025
Key Points Meta Platforms is betting big on AI super-intelligence. Applied Materials is set to benefit from new gate-all-around transistor innovations. On Semiconductor sold off after earnings but is on the brink of a recovery. 10 stocks we like better than Meta Platforms › The technology sector crashed through the first three months of 2025, but has experienced a ferocious recovery since early April. That recent rally has left many tech stocks either fully valued or overvalued. But just because it's harder to find a bargain doesn't mean there aren't good values in the tech sector. As it stands today in early August, these three names still look like good opportunities to scoop up for the long run. Meta Platforms Meta Platforms (NASDAQ: META) stock has appreciated almost nine times over since its 2022 lows, which is incredible to think about. Therefore, some may believe the stock is now overvalued. But in terms of valuation today, Meta is still not expensive. Shares currently trade at 27.6 times earnings, which is a little bit above the market. Still, those earnings incorporate two big investments that are forward-looking and not really benefiting current revenue: Reality Labs, and Meta's massive new artificial "superintelligence" venture. In the first half of the year, the Reality Labs segment lost a whopping $8.7 billion, while the "core" advertising business saw $46.7 billion in operating income. Moreover, that core operating income may be impacted by increased depreciation costs of Meta's recent AI-related capital spending. Yet just stripping out Reality Labs losses, Meta appears to on track to make over $100 billion in operating profit this year through its "core" Facebook and Instagram platforms. In that light, its current $1.9 trillion market cap doesn't look that demanding in relation to the core ads business, which grew an impressive 21.4% last quarter. If, for some reason, the metaverse and artificial superintelligence bets don't work out, CEO Mark Zuckerberg could just cancel those investments and concentrate on Meta's core platforms, which have some of the strongest network effects of any business today. In that scenario, Meta should still do well. However, if Zuckerberg's massive bets lead to AI superintelligence before its peers get there, there's significant upside. Since Meta is one of just a few companies that could crack superintelligence first, it's a must-own stock, given its reasonable price today. Applied Materials Semiconductor manufacturing equipment vendor Applied Materials (NASDAQ: AMAT) still finds its stock almost 30% below last summer's all-time highs, while trading at a quite reasonable 19 times 2025 earnings estimates and 18 times 2026 earnings estimates. There is perhaps some concern over the the near-term growth outlook, especially after rival ASML Holdings said last month that it couldn't guarantee a growth year in 2026. U.S.-China tensions may also be playing a part, as sales to Chinese customers made up 25% of Applied's revenues last quarter. However, Applied may be in a better position than ASML for the near and medium-term. This is because chipmakers are currently migrating to a new type of transistor architecture, going from finFET transistors, with the gate on three sides of the transistor source, to gate-all-around (GAA) transistors, in which transistors are stacked vertically with the gate on all four sides. This new innovation is less about lithography, which is where ASML dominates, and more about etch and deposition, which is where Applied generates most of its business. Furthermore, there is likely the need for a combination of innovative packaging and metrology technologies to pull the new transistor architecture off. As the most diversified semicap equipment company, Applied is in prime position to offer combined solutions to help customers solve these complex problems. With its stock down significantly from its highs, Applied has a dividend yield that stands at 1%. However, the company has raised its dividend at high rates over the last three years, with a 19% increase in 2023, a 25% increase in 2024, and a 15% increase in 2025. And the company's payout ratio is still below 20% of earnings, leaving even more firepower to raise the dividend and repurchase shares in the future. On Semiconductor Power, analog, and sensor chip producer On Semiconductor (NASDAQ: ON) fell hard after its recent earnings, but the drop may be an excellent opportunity for long-term investors. At first glance, it's hard to understand why On fell after earnings. The company beat revenue expectations and met adjusted earnings expectations, while Q3 guidance was basically in-line. But On had experienced a strong rally off the April bottom, so perhaps investors were expecting more in the way of a recovery in its core auto and industrial chip business. On's end-markets have been in one- to three-year downturns, depending on the market, as the post-COVID buying spree in cars and industrial chips gave way to a painful hangover. Yet while the recovery may not have been as strong as hoped, On's normally conservative management seems assured the bottom is in. CEO Hassane El-Khoury said in the press release, "We are beginning to see signs of stabilization across our end markets, and we remain well positioned to benefit from a market recovery." On is a leader in silicon carbide chips, which are increasingly needed in electric vehicles (EVs), energy infrastructure, and even AI data centers, although that data center revenue is small right now. While the core EV market has been slowing in the U.S. and Europe, if EVs are in fact the future, On should do well over the long-term. Meanwhile, El-Khoury noted On's AI data center revenue nearly doubled last quarter relative to the prior year. So, when On's auto and industrial end markets fully recover, this new high-growth data center business could be a cherry on top. Meanwhile, On has still been producing cash flow even during this downturn, enabling it to repurchase stock at low prices as investors wait for a recovery. Thus, the post-earnings give-back looks like a good opportunity to add to this long-term winner, which seems set for an inevitable recovery over the next couple of years. Should you invest $1,000 in Meta Platforms right now? Before you buy stock in Meta Platforms, 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 Meta Platforms 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 $653,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,119,863!* Now, it's worth noting Stock Advisor's total average return is 1,060% — a market-crushing outperformance compared to 182% 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 11, 2025
CNBC
05-08-2025
- Business
- CNBC
Beating analysts' estimates isn't always good enough. What that means now
Companies are trouncing expectations this earnings season, but investors are mostly turning a deaf ear. The S & P 500 is on track for earnings growth of 9% in the second quarter versus the same period a year ago, more than double the 4% that was at the start at the end of June, according to a Friday report from Goldman Sachs. Even so, the response has been middling, at best. Goldman Sachs found that the median stock whose earnings topped expectations has only outperformed the S & P 500 by 0.55 percentage point, below the historical median of 1.01 percentage points. Meanwhile, earnings disappointments have been punished more severely than in the past. The investment bank found that companies that missed earnings expectations underperformed by roughly twice the historical precedent. Shares of Amazon , for example, dropped more than 9% in two days after the online retailer reported second-quarter results that topped expectations but issued lackluster current-quarter operating income guidance. Other examples include On Semiconductor , which dropped more than 15% Monday even after posting solid results. Paltry reward "The reward for earnings beats has been paltry," Goldman's chief U.S. equity strategist David Kostin wrote. There are several potential reasons for the muted response to strong earnings. For one, much of the total index gain comes from the Magnificent Seven stocks , which as a group are responsible for year-over-year earnings growth of 26% in the second quarter. The rest of the S & P 500? Just 4%. For another, Kostin noted that analysts set an "unrealistically" low bar coming into the second quarter earnings season, fearful of the impact tariffs would have on businesses' ability to boost profits and plan for the future. Instead, a review of earnings calls thus far suggests management confidence in its ability to navigate levies, Kostin said. Still, there are those on Wall Street who worry that repeated tariff extensions will continue to weigh on the market and the economic outlook. For her part, Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, said a review of second quarter earnings calls is making her cautious. "In the Wednesday press conference," after last week's Federal Reserve policy meeting, "the phrase that Chairman Powell used that really resonated with us, is that we have a 'long way to go' in understanding what the impacts of tariffs will be on inflation," Calvasina wrote in a note. "What we've been reading during earnings has also led us to believe that we have a long way to go to understanding how the recent changes in trade policy will impact demand and 2026 outlooks," she added.
Miami Herald
24-07-2025
- Automotive
- Miami Herald
Struggling Japanese chipmaker goes bankrupt amid pressure from Chinese rivals
A once-promising Japanese chipmaker has collapsed under mounting debt, a slowdown in electric vehicle (EV) sales, and a surge in supply from Chinese rivals. The company filed for bankruptcy protection last week, less than three years after its widely heralded launch in late 2022. The firm was backed by Japanese government-linked financial institutions and focused on producing power semiconductors critical to power electronics markets, including electric vehicles (EVs), industrial equipment, and home appliances. Don't miss the move: Subscribe to TheStreet's free daily newsletter With strong public support and a refurbished factory previously operated by a major U.S. chipmaker, the company appeared poised to become a key domestic player in an industry viewed as essential to Japan's national security and economic development. But faced with mounting debt driven by deteriorating electric vehicle demand and a flood of low-cost components from fast-growing Chinese rivals, the startup's business model proved unsustainable. Related: Chipmakers like Nvidia, AMD get a gift from Washington Tokyo-based chipmaker JS Foundry, also known as JS Fab, launched in December 2022 with the backing of a fund run by the Development Bank of Japan and created by Mercuria Investment and Sangyo Sosei Advisory. JS Foundry filed for bankruptcy protection with the Tokyo District Court last week, leaving behind an estimated $110 million in outstanding debt. In a bid to minimize upfront costs, JS Foundry inherited its manufacturing facility, a 41-year-old fab in Niigata Prefecture, from U.S.-based On Semiconductor (ON) . The legacy infrastructure proved inadequate for the demanding process requirements of silicon carbide (SiC) device fabrication - a notoriously capital-intensive industry - possibly compounding JS Foundry's financial woes. Image source: Bloomberg/Getty Images JS Foundry's revenue surged in 2023, with sales swelling to around 10 billion yen (nearly $68 million) in its first year. Yet in 2024, revenue plummeted to 2.6 billion yen (around $17.6 million). This sharp decline followed the end of a production arrangement with On Semiconductor (stemming from On's divestment of its Japan facility in late 2022). More EV Stock News: Tesla robotaxi launch hits major speed bumpStruggling semiconductor company gets second chance to avoid bankruptcyTesla's robotaxi rollout runs into trouble JS Foundry's cash flows turned steeply negative, and the planned disbursement of subsidies from central and local governments in the coming weeks would have arrived too late to cover its mounting financial obligations. To make matters worse, the global downturn in EV sales hit the company especially hard. Rising interest rates, subsidy rollbacks, and underdeveloped charging infrastructure dampened enthusiasm for EVs, forcing automakers to slash chip orders. Compounding JS Foundry's financial woes, heavily subsidized Chinese chipmakers flooded the global market with affordable power semiconductor alternatives, making it clear that the startup lacked the necessary scale and vertical integration to compete. Finally, JS Foundry attempted talks with overseas investors to form a capital tie-up that would have helped it enter the silicon carbide power semiconductor segment, a next-generation technology known for its superior power efficiency. Related: Unexpected chip deal may reshape the semiconductor market But those talks collapsed earlier this year, effectively cutting off JS Foundry's last remaining viable path to survival. JS Foundry's collapse comes amid broader turmoil in the power semiconductor space. Rohm, another Japanese chip giant, recently reported its first net loss in over a decade, blaming underperforming power semiconductor investments. Last month, U.S.-based Wolfspeed (WOLF) , previously known as Cree, filed for Chapter 11 bankruptcy. The move triggered major write-downs for Japanese chipmaker Renasas Electronics, which had extended financing to Wolfspeed. Renansas subsequently abandoned plans to start SiC production later this year. In the end, JS Foundry's demise serves as a cautionary illustration of the risks of investing in a capital-intensive market where geopolitics, macroeconomic volatility, and technological disruption can rapidly upend even the most promising, initially well-capitalized businesses. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
08-06-2025
- Business
- Miami Herald
Markets start to gear up for summer drama
Investors have a problem to work through: How to decide how and when to invest or sell - and what all that entails. Stocks had a good week, with the Standard & Poor's 500 Index rising 1.5% and closing above 6,000 for the first time since Feb. 21. Friday's big rally had some market watchers declare 6,500 on the index a real possibility. Don't miss the move: Subscribe to TheStreet's free daily newsletter The other big averages rose at least 1.2% on the week. The small-cap Russell 2000 Index jumped 2.9%. There were lots of winners like: On Semiconductor (ON) , up 19.4%.Quantum Computing (QUBT) , up 21%.Robinhood Markets (HOOD) , up 13.2%.Appliance/electronics retailer Best Buy (BBY) , up 10.2%. And one clear non-winner: Tesla (TSLA) , down more than 14.8% in the wake of CEO Elon Musk's flame-throwing departure from the White House. An important downside: Bond yields moved up. The 10-year Treasury finished Frida with a 4.512% yield. Mortgage rates adjusted nearly to 7%. "I truly find it remarkable that interest rates (the foundation of all discounted dividend/cash flow models) are climbing so rapidly, yet equities are unconcerned," Doug Kass wrote in his Daily Diary on the Street Pro. Related: Scott Galloway sends blunt message to Elon Musk The week ahead offers some important earnings reports, but if you you're thinking of putting money to work, take a breath. This may also be a week in which what happens outside the stock and bond markets may prove more important that what happens. The events start with the meeting scheduled Monday in London between trade representatives from the United States and China to get the tariff negotiations moving. There is an August deadline get to a deal done, and President Donald Trump, not known for patience, may begin to get antsy. Related: Berkshire Hathaway shares sag since Buffett say he's retiring There is a closer deadline: July 9 for all the other trade deals to get done, and one isn't hearing much on that front, either. Markets will start getting nervous over these problems, and it will be tricky then because second-quarter earnings reports will start to come out. In addition, Apple (AAPL) is holding its World Wide Developer Conference this week. News may be committed at the event. Delta Air Lines (DAL) and PepsiCo (PEP) are expected to report the week of July 7. JPMorgan Chase (JPM) says it will report on July 15. Another factor to consider: an expected drop off in foreign travel to the United States. A December estimate for an 8.7% increase in foreign visitors to the U.S. in 2025 has been revised to an 8,7% decline, Bloomberg News reported. Marriott (MAR) has already trimmed its guidance for 2025 because of expected softness in U.S. and Canadian business. NurPhoto/Getty Images So far, 2025 has been a dramatic, nay wild, year for stocks. But a bad year? Not really or yet. The S&P 500 is up 2% on the year, with eight of 11 sectors showing gains. The Nasdaq is up 1.1%. The Nasdaq-100 Index, dominated by big tech stocks, is up 3.6%. Most of the gains have come since the market bottom in April. Industrials are leading the S&P 500 with a 9.7% gain this year, led by Howmet Aerospace (HWM) , which makes components for jet engines, GE Aerospace (GE) , which makes aircraft engines, and GE Vernova (GEV) , which concentrates on power equipment. The weakest sector is Consumer Discretionary, down 6.8%. The group includes Tesla, Caesar Entertainment (CZR) and homebuilders Lennar (LEN) and D.R. Horton (DHI) . Information technology, including Microsoft (MSFT) , Apple, Nvidia (NVDA) and Broadcom (AVGO) , is up 1.1%. More Retail Stocks: Halloween retailer sounds warning consumers need to hearTarget expands same-day delivery to 100s of retailersWalmart makes surprise cuts as it looks at tariff price hikes Oracle (ORCL) has a market capitalization of nearly $500 billion. The shares are up 7.3% this year but up 42% from the April post-tariff announcement low. The earnings estimate is $1.64 a share, up slightly from a year ago's $1.63. The revenue estimate is $15.6 billion, up 9% from a year ago. Adobe (ADBE) is best known for tools to design and produce content. Anyone who has sent a .pdf file to any where has probably used Adobe software. The earnings estimate is $4.97 a share, up 11% from a year. Revenue is estimated at $5.8 billion, up 9.3%. Adobe shares are down 6.2% this year. Mostly that is because valuation is more appropriate. The shares had been at 30 times earnings. That's down to 20. Smucker (SJM) , the Ohio maker of jams, peanut butter (Adams) bought Hostess Brands, makers of no less than Hostess Twinkies, for $4.6 billion. Digesting the acquisition has been hard. The sweet snacks business faces huge headwinds in the demand for healthier snacks. (Can you say Wegovy and Mounjaro?) Smucker shares are up just 0.7% this year. The company took a big write-down in the first quarter. This quarter's report is all about showing progress on the problem. The earnings estimate is $2.25 a share, down from $2.66 a year ago. The revenue forecast is $2.19 billion, down slightly from last year's $2.21 billion. Gamestop (GME) is the world's largest video game, consumer electronics, and gaming merchandise retailer. The revenue estimate is $796.8 million, down 9.6% from a year ago. Earnings may come in a 4 cents a share. Casey's General Stores, (CASY) , Iowa-based operator of convenience stores in the Midwest and South. After Monday's close. Core & Main (CNM) , distributor of water, sewer and fire-protection products. Before Tuesday's open. Online pet-supply retailer Chewy (CHWY) . Before Wednesday's open. Related: Veteran fund manager who predicted April rally updates S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
02-04-2025
- Business
- Yahoo
Is Now the Time to Buy the 3 Worst-Performing Stocks in the S&P 500 This Year?
Heading into trading on Monday, the S&P 500 was down around 5% to start 2025. Investors are worried about what lies ahead for the economy, and as a result, stocks have been in a free fall. The three worst-performing stocks on the broad index as of Monday were Deckers Outdoor (NYSE: DECK), Tesla (NASDAQ: TSLA), and On Semiconductor (NASDAQ: ON). Are these beaten-down stocks worth buying today, or should investors hold off on doing so? Here's a closer look at each one of them and why they may or may not be able to recover. The S&P 500 stock down the most after the first quarter of 2025 is Deckers Outdoor, a footwear company that is struggling mightily despite posting what seemed to be decent results in its most recent quarter. Although it generated 17% revenue growth during the last three months of 2024, with net sales coming in at $1.8 billion, analysts simply weren't thrilled with its guidance, even though it is projecting 15% in top-line growth this year. Investors are concerned about the economy as a whole, and for a shoe stock that was recently trading at more than 35 times its trailing earnings, it may have been difficult to justify buying Deckers, even despite its strong quarterly numbers. Now, the stock trades at a more modest multiple of about 18 times trailing earnings. While it's a cheaper stock to own, I wouldn't rush to buy this one just because the economy is on shaky ground right now. Trade wars and tariffs could weigh on Deckers' business in the months ahead, and there's a risk its guidance could be cut. In the second spot on this list is Tesla, which is doing poorly due to its questionable growth prospects and also as a result of its CEO Elon Musk and his close relationship with President Donald Trump -- and the government cuts Musk has been behind, which consumers and analysts have not been happy about. There have been protests at Tesla dealerships, and the fallout could weigh heavily on the business. The company was already struggling with shrinking margins and rising competition even before all of this. Tesla's automotive revenue fell by 8% for the final three months of the year, down to $19.8 billion. Profits of $2.3 billion also declined by a staggering 71% year over year. Unfortunately, things look to be going from bad to worse for Tesla, which is why I'd still stay away from the electric vehicle maker's stock. At more than 90 times its estimated future earnings, this is still a highly expensive stock to buy -- it has a lot more room to fall. On Semiconductor, which does business as onsemi, is the third-worst-performing stock on the S&P 500 at the time of writing this article. The semiconductor company generates the bulk of its revenue from the automotive sector, which can make it vulnerable to the same economic headwinds that are affecting Tesla and other electric vehicle makers, including tariffs. That's concerning when you consider its results for 2024 weren't impressive, as sales totaled $7.1 billion and declined by 14% year over year. Given the current macroeconomic challenges, a recovery may not happen quickly for onsemi. But with a relatively modest valuation -- it trades at 16 times next year's estimated earnings -- it could be the best buy on this list, assuming you're willing to be patient with the business. The opportunities for semiconductor companies are significant, and while onsemi is struggling today, its long-term growth prospects are promising not just in the automotive sector but in others as well. The stock is trading at multiyear lows (it hasn't been at these levels since 2021), and while a turnaround may not be imminent, this can potentially be a good long-term buy. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $281,057!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $42,114!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $502,905!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of April 1, 2025 David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Deckers Outdoor and Tesla. The Motley Fool recommends ON Semiconductor. The Motley Fool has a disclosure policy. Is Now the Time to Buy the 3 Worst-Performing Stocks in the S&P 500 This Year? was originally published by The Motley Fool Sign in to access your portfolio
