computers – Page 6

If Nvidia looked more like Salesforce, it might unlock billions more in cash

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Nvidia Corp. is raking in billions in cash, but one analyst thinks the chip maker could throw $100 billion more onto the pile if it started to look more like Salesforce Inc.

Nvidia
NVDA,
+2.29%
might unlock even more cash by developing businesses that expand recurring revenue, according to BofA Securities analyst Vivek Arya. The company has suffered some boom-and-bust cycles in recent years, and another bust could be smoothed by developing longer-term software contracts akin to those of Salesforce
CRM,
-0.05%.
, Workday Inc.
WDAY,
-0.48%
and ServiceNow Inc.
NOW,
+0.64%,
which generate recurring revenue from their customers.

Arya sees a pathway for Nvidia to rake in $100 billion in incremental free cash flow over the next two years if it can bulk up its own recurring-revenue options.

Read: Apple’s stock needs to get ‘unstuck’ — and its innovation rut may not be helping

“While NVDA has a solid lead in AI, hardware-oriented businesses are not valued as highly as visibility tends to be limited,” Arya wrote. Nvidia generates only about $1 billion, or 2%, of its sales from software and subscriptions. Arya doesn’t think the company can get much higher than $5 billion with its software and subscription offerings unless it turns to acquisitions.

Nvidia has shown some openness to deals that would beef up its intellectual property and software offerings, Arya notes, as it tried to buy British chip designer Arm Holdings
ARM,
-1.96%
before facing regulatory pushback.

“We envision [Nvidia] considering more enhanced partnerships/M&A of software companies that are helping traditional enterprise customers deploy, monitor and analyze [generative AI] apps,” he wrote. Nvidia “is already serving them via on-premise hardware and/or its DGX cloud service, but we believe greater direct recurring software/service channel could be more impactful.”

The addition of more recurring-revenue streams could help Nvidia’s “relatively depressed trading multiple,” in Arya’s view. Nvidia shares trade at a 20% to 30% discount to its “Magnificent Seven” peers on the basis of price to earnings as well as enterprise value to free cash flow, even though the company’s compound annual growth rate on the top line is three times what it is for those other tech giants.

The discount is “partly due to uncertainty in [calendar 2025] growth prospects, and partly due to a very hardware-dependent business unlike other large-cap software/internet peers that have recurring-revenue profiles,” he wrote.

Arya has a buy rating and $700 price objective on the stock.

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January 5, 2024

The Russell 2000 Index has soared, but you might be better off looking elsewhere for quality small-cap stocks

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The Russell 2000 Index soared 12% in December, which might reflect investors’ exuberance about the state of the U.S. economy — it appears the Federal Reserve has won its battle against inflation.

But if you are looking to broaden your exposure to the stock market beyond the large-cap S&P 500
SPX,
buying shares of a fund that tracks the Russell 2000 Index
RUT
might not be the best way to do it. This is because the Russell 2000 isn’t selective — it is made up of the smallest 2,000 companies by market capitalization in the Russell 3000 Index
RUA,
which itself is designed to capture about 98% of the U.S. public equity market.

A better choice might be the S&P Small Cap 600 Index
SML
because S&P Global requires companies to show four consecutive quarters of profitability to be initially included in the index, among other criteria.

Below is a screen of analysts’ favorite stocks among the S&P Small Cap 600, along with another for the Russell 2000.

Watch for a “head fake”

Much of the small-cap buying in December might have resulted from covering of short positions by hedge-fund managers. This idea is backed by the timing of trading activity immediately following the Federal Open Market Committee’s announcement on Dec. 13 that it wouldn’t change its interest-rate policy, according to MacroTourist blogger Kevin Muir. The Fed’s economic projections released the same day also indicate three cuts to the federal-funds rate in 2024.

Heading into the end of the year, a fund manager who had shorted small-caps, and then was surprised by the Fed’s interest-rate projections, might have scrambled to buy stocks it had shorted to close-out the positions and hopefully lock in gains, or limit losses.

That buying activity and resulting pop in small-cap prices could set up a typical “head fake” for investors as the new year begins, according to Muir.

The long-term case for quality

Looking at data for companies’ most recently reported fiscal quarters, 58% of the Russell 2000 reported positive earnings per share, according to data provided by FactSet. In other words, hundreds of these companies were losing money. These might include promising companies facing “binary events,” such as make-or-break drug trials in the biotechnology industry.

In comparison, 78% of companies among the S&P Small Cap 600 were profitable, and 93% of the S&P 500 were in the black.

Here are long-term performance figures for exchange-traded funds that track all three indexes:

ETF	Ticker	2023	3 years	5 years	10 years	15 years	20 years
iShares Russell 2000 ETF	IWM	17%	7%	61%	99%	428%	365%
iShares Core S&P Small Cap ETF	IJR	16%	25%	69%	129%	540%	515%
SPDR S&P 500 ETF Trust	SPY	26%	34%	108%	210%	629%	527%
Source: FactSet

An approach tracking the S&P Small Cap 600 has outperformed the Russell 2000 for all periods, with margins widening as you go further back.

Brett Arends: You own the wrong small-cap fund. How to get into a better one.

Looking ahead for quality… or not

For the first screen, we began with the S&P Small Cap 600 and narrowed the list to 385 companies covered by at least five analysts polled by FactSet. Then we cut the list to 92 companies with “buy” or equivalent ratings among at least 75% of the covering analysts.

Here are the 20 remaining stocks among the S&P Small Cap 600 with the highest 12-month upside potential indicated by analysts’ consensus price targets:

Company	Ticker	Share “buy” ratings	Dec. 29 price	Consensus price target	Implied 12-month upside potential
Vir Biotechnology Inc.	VIR, +4.47%	88%	$10.06	$32.00	218%
Arcus Biosciences Inc.	RCUS, +3.04%	82%	$19.10	$41.00	115%
Xencor Inc.	XNCR, +6.03%	92%	$21.23	$39.83	88%
Dynavax Technologies Corp.	DVAX, +2.86%	100%	$13.98	$24.80	77%
ModivCare Inc.	MODV, +0.95%	100%	$43.99	$75.50	72%
Xperi Inc	XPER, +1.81%	80%	$11.02	$18.20	65%
Thryv Holdings Inc.	THRY,	100%	$20.35	$32.75	61%
Ligand Pharmaceuticals Inc.	LGND, +1.25%	100%	$71.42	$114.80	61%
Green Plains Inc.	GPRE, -1.67%	80%	$25.22	$40.30	60%
Patterson-UTI Energy Inc.	PTEN, +0.28%	75%	$10.80	$17.00	57%
Ironwood Pharmaceuticals Inc. Class A	IRWD, +8.48%	83%	$11.44	$17.83	56%
Catalyst Pharmaceuticals Inc.	CPRX, +1.78%	100%	$16.81	$26.20	56%
Payoneer Global Inc.	PAYO, -3.45%	100%	$5.21	$8.00	54%
Helix Energy Solutions Group Inc.	HLX, -2.63%	83%	$10.28	$15.00	46%
Arlo Technologies Inc.	ARLO, -3.05%	100%	$9.52	$13.80	45%
Pacira Biosciences Inc.	PCRX, -5.16%	100%	$33.74	$48.40	43%
Privia Health Group Inc.	PRVA, +2.95%	100%	$23.03	$32.53	41%
Semtech Corp.	SMTC, -1.23%	92%	$21.91	$30.90	41%
Talos Energy Inc.	TALO, +1.19%	78%	$14.23	$20.00	41%
Digi International Inc.	DGII, -1.21%	100%	$26.00	$36.14	39%
Source: FactSet

Any stock screen should only be considered a starting point. You should do your own research to form your own opinion before making any investment. one way to begin is by clicking on the tickers for more about each company.

Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

Moving on to the Russell 2000, when we narrowed this group to stocks covered by at least five analysts polled by FactSet, we were left with 936 companies. Among these, 355 have “buy” or equivalent ratings among at least 75% of the covering analysts.

Among those 355 stocks in the Russell 2000, these 20 have the highest implied upside over the next year, based on consensus price targets:

Company	Ticker	Share “buy” ratings	Dec. 29 price	Consensus price target	Implied 12-month upside potential
Karyopharm Therapeutics Inc.	KPTI, +4.18%	75%	$0.87	$6.00	594%
Rallybio Corp.	RLYB, +0.42%	100%	$2.39	$16.50	590%
Vor Biopharma Inc.	VOR, -0.89%	100%	$2.25	$15.44	586%
Tenaya Therapeutics Inc.	TNYA, -0.62%	100%	$3.24	$19.14	491%
Compass Therapeutics Inc.	CMPX, -5.13%	86%	$1.56	$9.17	488%
Vigil Neuroscience Inc.	VIGL, +2.66%	88%	$3.38	$18.75	455%
Trevi Therapeutics Inc.	TRVI, -2.99%	100%	$1.34	$7.33	447%
Inozyme Pharma Inc.	INZY, +1.64%	100%	$4.26	$21.00	393%
Gritstone bio Inc.	GRTS, +6.86%	100%	$2.04	$10.00	390%
Actinium Pharmaceuticals Inc.	ATNM, +4.72%	83%	$5.08	$23.36	360%
Lineage Cell Therapeutics Inc.	LCTX,	86%	$1.09	$4.83	343%
Century Therapeutics Inc.	IPSC, +9.64%	86%	$3.32	$14.67	342%
Acrivon Therapeutics Inc.	ACRV, +1.83%	100%	$4.92	$21.13	329%
Avidity Biosciences Inc.	RNA, +1.22%	100%	$9.05	$37.50	314%
Longboard Pharmaceuticals Inc.	LBPH, +316.25%	100%	$6.03	$24.17	301%
Omega Therapeutics Inc.	OMGA, -1.33%	100%	$3.01	$12.00	299%
Allogene Therapeutics Inc.	ALLO, +12.77%	82%	$3.21	$12.79	298%
X4 Pharmaceuticals Inc.	XFOR, +5.21%	86%	$0.84	$3.26	289%
Caribou Biosciences Inc.	CRBU, -2.79%	89%	$5.73	$22.25	288%
Stoke Therapeutics Inc.	STOK, +11.41%	78%	$5.26	$19.33	268%
Source: FactSet

That’s right — this Russell 2000 list is all biotech. And in case you are wondering if any companies are on both lists, the answer is no.

Don’t miss: 11 dividend stocks with high yields expected to be well supported in 2024 per strict criteria

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January 2, 2024

Apple's stock falls after 'sell' call from Barclays

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Shares of Apple Inc. are starting 2024 with a selloff, after Barclays analyst Tim Long said it was “time for a breather,” citing weak hardware sales as iPhone 15 demand disappoints.

“We are still picking up weakness on iPhone volumes and mix, as well as a lack of bounce-back in Macs, iPads and wearables,” Long wrote in a note to clients. “The biggest takeaway from the latest checks is incrementally worse [iPhone] 15 data points out of China, together with developed markets remaining soft.”

He cut his rating on the stock
AAPL,
-0.54%
to underweight from neutral, and trimmed his price target to $160 from $161. The new target implies about 17% downside from Friday’s closing price of $192.53.

The stock slumped 1.8% in premarket trading Tuesday, putting it on track to open at a seven-week low.

Long said iPhone 15 sales have been “lackluster” and believes Phone 16 sales will be the same, as he expects other hardware categories to remain weak. He said it’s time for investors to take a “breather” on the stock, as he doesn’t think it can keep rallying in the face of downbeat demand data, like it did in 2023.

“We expect reversion after a year when most quarters were missed and the stock outperformed,” Long wrote.

He expects Apple to report “in-line” fiscal first-quarter results, which runs through December, but he trimmed his second-quarter to further below consensus expectations.

He now expects earnings per share and revenue for the quarter through March to be down in the low-single-digit percentage range, while the FactSet consensus calls for EPS to be up 2.6% at $1.57 and revenue to rise 1.1% to $95.8 billion.

Apple’s stock surged 48.2% in 2023, or almost double the S&P 500 index’s
SPX
gain of 24.2%, even as revenue for each quarter of fiscal 2023 through September was below that of a year ago.

Long is now one of just four of the 44 analysts surveyed by FactSet who are bearish on Apple’s stock, while 27 (61%) are bullish and 13 are neutral. His $160 price target is 19.2% below the average target of $197.92.

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January 2, 2024

These 20 stocks soared the most in 2023

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(Updated with Friday’s closing prices.)

The 2023 rally for stocks in the U.S. accelerated as more investors bought the idea that the Federal Reserve succeeded in its effort to bring inflation to heel.

The S&P 500
SPX
ended Friday with a 24.2% gain for 2023, following a 19.4% decline in 2022. (All price changes in this article exclude dividends). Among the 500 stocks, 65% were up for 2023. Below is a list of the year’s 20 best performers in the benchmark index.

This article focuses on large-cap stocks. MarketWatch Editor in Chief Mark DeCambre took a broader look at all U.S. stocks of companies with market capitalizations of at least $1 billion, to list 10 with gains ranging from 412% to 1,924%.

The Fed began raising short-term interest rates and pushing long-term rates higher in March 2022 by allowing its bond portfolio to run off. That explains the poor performance for stocks in 2022, as bonds and even bank accounts because more attractive to investors.

The central bank hasn’t raised the federal-funds rate since moving it to the current target range of 5.25% to 5.50% in July, and its economic projections point to three rate cuts in 2024.

Investors are anticipating the return to a low-rate environment by scooping up 10-year U.S. Treasury notes
BX:TMUBMUSD10Y,
whose yield ended the year at 3.88%, down from 4.84% on Oct. 27 — the day of the S&P 500’s low for the second half of 2023.

Read: Treasury yields end mostly higher but little changed on year after wild 2023

Before looking at the list of best-performing stocks of 2023, here’s a summary of how the 11 sectors of the S&P 500 performed, with the full index and three more broad indexes at the bottom:

Sector or index	2023 price change	2022 price change	Price change since end of 2021	Forward P/E	Forward P/E at end of 2022	Forward P/E at end of 2023
Information Technology	56.4%	-28.9%	11.5%	26.7	20.0	28.2
Communication Services	54.4%	-40.4%	-7.6%	17.4	14.3	21.0
Consumer Discretionary	41.0%	-37.6%	-11.4%	26.2	21.7	34.7
Industrials	16.0%	-7.1%	8.0%	20.0	18.7	22.0
Materials	10.2%	-14.1%	-4.9%	19.5	15.8	16.6
Financials	9.9%	-12.4%	-3.4%	14.6	13.0	16.3
Real Estate	8.3%	-28.4%	-21.6%	18.3	16.9	24.7
Healthcare	0.3%	-3.6%	-3.3%	18.2	17.7	17.3
Consumer Staples	-2.2%	-3.2%	-5.4%	19.3	20.6	21.4
Energy	-4.8%	59.0%	51.8%	10.9	9.8	11.1
Utilities	-10.2%	-1.4%	-11.4%	15.9	18.7	20.4

S&P 500 SPX	24.2%	-19.4%	0.4%	19.7	16.8	21.6
Dow Jones Industrial Average DJIA	13.7%	-8.8%	3.8%	17.6	16.6	18.9
Nasdaq Composite COMP	43.4%	-33.1%	-3.5%	26.9	22.6	32.0
Nasdaq-100 NDX	53.8%	-33.0%	3.5%	26.3	20.9	30.3
Source: FactSet

A look at 2023 price action really needs to encompass what took place in 2022 for context. The broad indexes haven’t moved much from their levels at the end of 2022 (again, excluding dividends). We have included current forward price-to-earnings ratios along with those at the end of 2021 and 2022. These valuations have declined a bit, which may provide some comfort for investors wondering how likely it is for stocks to continue to rally in 2024.

Biggest price increases among the S&P 500

Here are the 20 stocks in the S&P 500 whose prices rose the most in 2023:

Company	Ticker	2023 price change	2022 price change	Price change since end of 2021	Forward P/E	Forward P/E at end of 2022	Forward P/E at end of 2021
Nvidia Corp.	NVDA,	239%	-50%	68%	24.9	34.4	58.0
Meta Platforms Inc. Class A	META, -1.22%	194%	-64%	5%	20.2	14.7	23.5
Royal Caribbean Group	RCL, -0.37%	162%	-36%	68%	14.3	14.9	232.4
Builders FirstSource Inc.	BLDR, -1.02%	157%	-24%	95%	14.2	10.7	13.3
Uber Technologies Inc.	UBER, -2.49%	149%	-41%	47%	56.9	N/A	N/A
Carnival Corp.	CCL, -0.70%	130%	-60%	-8%	18.7	41.3	N/A
Advanced Micro Devices Inc.	AMD, -0.91%	128%	-55%	2%	39.7	17.7	43.1
PulteGroup Inc.	PHM, -0.26%	127%	-20%	81%	9.1	6.3	6.2
Palo Alto Networks Inc.	PANW, -0.24%	111%	-25%	59%	50.2	38.0	70.1
Tesla Inc.	TSLA, -1.86%	102%	-65%	-29%	66.2	22.3	120.3
Broadcom Inc.	AVGO, -0.55%	100%	-16%	68%	23.2	13.6	19.8
Salesforce Inc.	CRM, -0.92%	98%	-48%	4%	28.0	23.8	53.5
Fair Isaac Corp.	FICO, -0.46%	94%	38%	168%	47.1	29.3	28.7
Arista Networks Inc.	ANET, -0.62%	94%	-16%	64%	32.7	22.3	41.4
Intel Corp.	INTC, -0.28%	90%	-49%	-2%	26.6	14.6	13.9
Jabil Inc.	JBL, -0.45%	87%	-3%	81%	13.5	7.9	10.3
Lam Research Corp.	LRCX, -0.81%	86%	-42%	9%	25.2	13.5	20.2
ServiceNow Inc.	NOW, +0.57%	82%	-40%	9%	56.0	42.6	90.1
Amazon.com Inc.	AMZN, -0.94%	81%	-50%	-9%	42.0	46.7	64.9
Monolithic Power Systems Inc.	MPWR, -0.23%	78%	-28%	28%	49.1	27.3	57.9
Source: FactSet

Click on the tickers for more about each company.

Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

Don’t miss: Nvidia tops list of Wall Street’s 20 favorite stocks for 2024

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December 30, 2023

Intel Rallied 91% This Year. Expect Higher Highs in 2024.

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What a strange year 2023 was for Intel.

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December 29, 2023

Apple can sell its latest smartwatches again after court pauses FTC import ban

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The latest Apple Watches are available again after the company scored a legal victory Wednesday.

“We are thrilled to return the full Apple Watch lineup to customers in time for the new year,” Apple
AAPL,
+0.05%
said in a statement to MarketWatch. “Apple Watch Series 9 and Apple Watch Ultra 2, including the blood-oxygen feature, will become available for purchase again in the United States at Apple Stores starting today and from apple.com tomorrow by 3 p.m. ET.”

A U.S. appeals court earlier Wednesday temporarily blocked a government commission’s import ban on popular Apple Watch models following a patent dispute with medical-technology firm Masimo Corp.
MASI,
-4.57%.

The court’s order allows Apple to temporarily resume selling the Apple Watch Series 9 and Apple Watch Ultra 2. Both watches were pulled from Apple’s website last week and off store shelves this week when the ban went into effect. The appeals court is weighing a longer halt on the import and sales ban.

Masimo declined to comment.

On Tuesday, the tech giant filed an emergency request for the U.S. Court of Appeals for the Federal Circuit to halt the ban at least until U.S. Customs and Border Protection decides whether redesigned versions of its watches infringe Masimo’s patents.

The appeals court’s decision will allow the U.S. Customs department to consider Apple’s redesign of the offending Apple Watch models. A fix is expected by Jan. 12. Apple said in the motion Tuesday it could “suffer irreparable harm” if the ban is kept in place while the appeal is ongoing.

Shares of Apple were flat in trading Wednesday.

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December 27, 2023

Intel, Tesla, Apple, Iovance, NetEase, Coherus BioSciences, and More Stock Market Movers

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Updated Dec 27, 2023, 7:34 am EST / Original Dec 27, 2023, 4:26 am EST

Stock futures traded slightly lower Wednesday after the S&P 500 finished higher Tuesday and just 0.45% below its record close of 4,796.56 hit Jan. 3, 2022. The broad market index has risen 24% this year and has gained 4.5% this month as traders bet the Federal Reserve will begin cutting interest rates as soon as March.

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December 27, 2023

Why Alphabet Could Be the Best Bet Among Magnificent 7 Stocks in the New Year

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Alphabet could be the best bet among the Magnificent Seven stocks that led the market higher in 2023.

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December 24, 2023

Synopsys and Ansys in talks to merge: report

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Shares of Ansys Inc. soared 18% in trading Friday on reports the company is in discussions to be acquired by Synopsys Inc. in a deal that would create a design-software behemoth.

The potential deal would kick off 2024 with a mega-merger, even as the Federal Trade Commission attempts to crack down on such transactions. Talks remain fluid and a third party might still emerge as a possible suitor of Ansys, according to a Wall Street Journal report, which cited people familiar with the situation.

Ansys
ANSS,
+18.08%,
which has a market value of nearly $26.3 billion, makes software that helps predict how products in aerospace, healthcare and automotive applications will work in the real world. A deal could be struck early in 2024, according to people familiar with the matter. Ansys reported revenue of $2.1 billion in 2022.

Synopsys
SNPS,
-6.34%,
with a market value of $85.1 billion, makes software that engineers use to design and test silicon chips used in smartphones, self-driving cars and other forms of artificial intelligence. Its stock has climbed 65% this year as investors have hopped on the AI bandwagon boom. Shares of Synopsys dipped 6% in late trading Friday.

Synopsys’s customers include Nvidia Corp.
NVDA,
-0.33%,
Intel Corp.
INTC,
+1.95%
and Advanced Micro Devices Inc.
AMD,
-0.22%.

Representatives from Synopsys and Ansys were not immediately available for comment.

Should the companies strike a merger, it would offer a fresh test for the FTC and its chair, Lina Khan, who have opposed large tech mergers and acquisitions. The agency unsuccessfully sued Facebook parent Meta Platforms Inc.
META,
-0.20%
in its pursuit of VR developer Within, as well as Microsoft Corp.’s
MSFT,
+0.28%
$69 billion purchase of Activision Blizzard Inc.

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December 22, 2023

Activision Blizzard to pay $55 million to settle California civil-rights lawsuit

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Videogame maker Activision Blizzard has agreed to pay nearly $55 million to settle a California civil-rights lawsuit brought over complaints of sexual harassment, discrimination and pay disparities by women employees that helped trigger the company’s acquisition by Microsoft.

The settlement, announced by the California Civil Rights Department on Friday evening, resolves the lawsuit filed against the “Call of Duty” videogame studio by the agency in 2021 over claims that it “discriminated against women at the company, including by denying promotion opportunities and paying them less than men for doing substantially similar work,” CRD said.

The agreement, subject to court approval, will see Activision pay nearly $46 million into a settlement fund dedicated to compensating women employees and contract workers at the company, plus more than $9 million in attorneys’ fees and costs. Additionally, Activision will take steps “to help ensure fair pay and promotion practices at the company,” including retaining an independent consultant to evaluate its compensation and promotion policies.

Yet the settlement also sees CRD withdraw its initial claims alleging a culture of widespread, systemic workplace sexual harassment at Activision, according to a copy of the agreement provided to MarketWatch. The document notes that the department is filing an amended complaint that removes the sexual-harassment allegations against the company and focuses on the gender-based pay and promotion claims.

CRD made no note of its prior sexual-harassment claims against Activision in its announcement Friday. A spokesperson for the department said the statement “largely speaks for itself with respect to the historic nature of this more than $50 million settlement agreement, which will bring direct relief and compensation to women who were harmed by the company’s discriminatory practices.

Representatives for Activision declined to comment.

The Wall Street Journal first reported the news of the settlement Friday.

The California agency’s complaint was one of several high-profile investigations by both state and federal regulators in recent years into alleged workplace misconduct at Activision and failures by its leadership to respond appropriately.

While Activision repeatedly denied the allegations, they ramped up pressure on the Santa Monica, Calif.-based company and its CEO, Bobby Kotick, and eventually led to a $68.7 billion takeover bid by Microsoft
MSFT,
+1.31%
in January 2022. The acquisition closed this October after receiving approval by U.K. and E.U. antitrust regulators, though the U.S. Federal Trade Commission continues to challenge the deal in court. Kotick is expected to leave the company, which he led for more than three decades, at the end of this year.

The settlement would be the second-largest ever for the California Civil Rights Department, according to the Journal, after its $100 million agreement with another Los Angeles-area videogame developer, Riot Games, to resolve gender-discrimination allegations in 2021. The agency had initially sought a much-larger settlement with Activision, the publication reported, citing how the state had estimated the company’s liability at nearly $1 billion to some 2,500 employees with potential claims.

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December 15, 2023

Broadcom now ranks among 10 largest U.S. companies after big 2023 stock gains

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Nvidia Corp. has catapulted up the list of the most valuable U.S. companies this year, rising eight spots from the end of last year to sit in the fifth position with a market capitalization of $1.2 trillion.

But other chip companies have seen their positions rise even more. Just look at Broadcom Inc.
AVGO,
+2.10%,
which has climbed 16 spots over the course of 2023 and on Friday cracked the top 10 for the first time, according to Dow Jones Market Data. Broadcom eclipsed Visa Inc.
V,
-0.27%
at Friday’s close to take the No. 10 spot, with a valuation of $527.7 billion.

Read: Could Nvidia’s stock — up 231% this year — actually be a bargain?

Admittedly, Broadcom had some help along the way. The company acquired VMware in late November, and its market capitalization gained about $50 billion at the close of the transaction, according to FactSet data.

But Broadcom’s ascent also reflects how chip stocks have gotten more shine this year amid the artificial-intelligence frenzy. Broadcom’s stock has doubled so far in 2023.

Mizuho desk-based analyst Jordan Klein expects “an order acceleration in networking silicon for AI clusters” in the second half of 2024, as calendar year 2025 could bring a big year of capital-expenditure investments in AI for ethernet back-end high-speed connections.

Broadcom “is the KEY WINNER in that investment cycle as the arms dealer to all networking OEMs,” or original equipment manufacturers, wrote Klein, who’s associated with Mizuho’s sales team and not its research arm.

Advanced Micro Devices Inc.
AMD,
+0.83%
has also seen a nice march up the charts, rising 48 spots so far in 2023 to rank 30th in terms of market cap. AMD was valued at $223.9 billion as of Friday’s close.

“We view AMD as well-positioned to gain incremental share of the hugely profitable $100 billion-plus accelerator market while continuing to make progress in server [central processing units] against incumbent [Intel],” BofA Securities analyst Vivek Arya wrote in a recent upgrade.

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December 15, 2023

Apple Stock Looks Set to Break Through $200. 3 Reasons It Can.

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By Adam Clark

Updated Dec 14, 2023, 9:22 am EST / Original Dec 14, 2023, 8:09 am EST

Apple shares have set an all-time high and the stock is hovering just below $200. There are three reasons to think Apple can break through the barrier.

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December 14, 2023

Nokia Cuts Operating Margin Guidance Amid Challenging Market

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Updated Dec. 12, 2023 2:54 am ET

Nokia cut its operating margin guidance, with market conditions in its mobile networks business remaining challenging due to falling operator spending and the Indian market normalizing after a period of rapid 5G roll-outs.

The Finnish telecom equipment maker said Tuesday that it now targets a comparable operating margin target of at least 13% by 2026, from at least 14% previously.

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December 11, 2023

Nokia Cuts Operating Margin Guidance Amid Challenging Market

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By Dominic Chopping

Nokia cut its operating margin guidance as market conditions in its mobile networks business remain challenging, with operator spending falling and a normalization in India after a period of rapid 5G deployment.

The Finnish telecom equipment maker said Tuesday that it now targets a comparable operating margin target of at least 13% by 2026, from at least 14% previously.

“Nokia still sees a path to achieving the at least 14% comparable operating margin target but considering the current market conditions in mobile networks, this is deemed a prudent change,” the company said.

Write to Dominic Chopping at dominic.chopping@wsj.com

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December 11, 2023

Oracle Stock Falls After Earnings Report Disappoints

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Oracle shares were heading sharply lower in late trading Monday after the enterprise software giant posted November quarter financial results that fell short of both the company’s own guidance and consensus Street estimates.

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December 11, 2023

Apple iPhone, Watch product design head to leave: report

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Tang Tan, the Apple Inc. executive who headed product design for the iPhone and Apple Watch, is leaving amid a shake-up of the division responsible for the company’s most critical product lines, according to a Bloomberg report.

Tan reports to John Ternus, senior vice president of hardware engineering, and the division is reshuffling duties to handle the transition.

Earlier this week, Bloomberg reported that Steve Hotelling, who worked on key technologies like the iPhone’s multitouch screen, Touch ID, and Face ID, is retiring from Apple.

Shares of Apple
AAPL,
+0.74%
are up 0.7% in trading Friday. Apple had no comment on the departures.

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December 8, 2023

AMD Stock Is More Expensive Than Nvidia. That Makes No Sense.

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Advanced Micro Devices is on a roll this week, with its shares marching higher since the chip maker revealed ambitious plans to push into artificial intelligence. Investors looking to dive in best be warned: the stock now looks more expensive than Nvidia.

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December 8, 2023

Broadcom logs earnings beat, but chip stock edges lower

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Broadcom Inc. topped profit expectations for its latest quarter, but shares of the chip company were falling in Thursday’s aftermarket action.

The company recorded fiscal fourth-quarter net income of $3.5 billion, or $8.25 a share, whereas it posted net income of $3.3 billion, or $7.83 a share, in the year-earlier period.

On an adjusted basis, Broadcom
AVGO,
+2.06%
earned $11.06 a share, up from $10.45 a share a year before, while analysts tracked by FactSet were modeling $10.96 a share.

Revenue increased to $9.30 billion from $8.93 billion, while the FactSet consensus was for $9.28 billion. Broadcom generated $7.33 billion in revenue from semiconductor solutions, up 3%, along with $1.97 billion in revenue from infrastructure solutions, up 7%.

Results were “driven by investments in accelerators and network connectivity for AI by hyperscalers,” Chief Executive Hock Tan said in a release.

Broadcom’s stock was off about 2% in Thursday’s extended session.

For the new fiscal year, Broadcom anticipates $50 billion in revenue, when including contributions from the recently closed acquisition of VMware that may not be fully reflected in consensus estimates. The company also expects adjusted earnings before interest, taxes, depreciation and amortization to be about 60% of projected revenue; it was 65% of revenue in the most recent fiscal year.

The company expects its semiconductor segment to sustain a mid- to high-single-digit revenue growth rate in fiscal 2024.

Opinion: AMD is poised for huge AI growth in 2024 and the stock market is paying attention

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December 7, 2023

MongoDB earnings clear Wall Street’s bar, but stock falls

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MongoDB Inc. easily cleared expectations with its latest results and outlook, but shares of the database company were declining 5% in Tuesday’s extended session.

The database-management company posted a fiscal third-quarter net loss of $29.3 million, or 41 cents a share, compared with a net loss of $84.9 million, or $1.23 a share, in the year-prior quarter. On an adjusted basis, MongoDB
MDB,
+2.52%
posted earnings per share of 96 cents, while analysts were expecting 51 cents a share.

MongoDB’s revenue came in at $433 million, up 30% from a year before, while the FactSet consensus was for $406 million.

“MongoDB has clearly established itself as an indispensable part of the tech stack of any organization focused on building durable competitive differentiation through software development,” Chief Executive Dev Ittycheria said in a release. He noted that the company was having success “in winning new workloads from both new and existing customers across verticals, geographies and customer segments.”

For the fiscal fourth quarter, MongoDB anticipates $429 million to $433 million in revenue, along with 44 cents to 46 cents in adjusted EPS. The FactSet consensus was for $418 million in revenue and 37 cents in adjusted EPS.

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December 5, 2023

Why Sam Altman is a no-brainer for Time’s ‘Person of the Year’

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Nothing has changed our lives more this year than the advances made in artificial intelligence — and they have the potential to alter our lives in even more dramatic ways down the road.

So it’s a no-brainer that Sam Altman, co-founder and recently returned chief executive of the once-little-known OpenAI, should be named “Person of the Year” by Time Magazine when the selection is announced Wednesday.

Altman has already cracked Time’s shortlist, joining candidates from varied backgrounds, including world leaders like Xi Jinping and entertainment phenomenon Taylor Swift. The selection ultimately comes down to an “individual or group who most shaped the previous 12 months, for better or for worse.”

But Time has often given “agents of change” its yearly honor — just look at 2021 winner Elon Musk — and Altman certainly fits that bill.

No other innovation in the past year has had an impact in such disparate realms. OpenAI publicly launched its ChatGPT chatbot late last year, and as the technology grew viral in 2023, it upended the stock market, Silicon Valley and companies that wouldn’t normally be classified as technology businesses. The ensuing product development and surge in generative AI investment revitalized a tech industry that had sunk into the doldrums amid a pandemic hangover.

Admittedly, it will take time for companies to realize the true financial benefits of AI: Nvidia Corp.
NVDA,
-2.68%
is among the few to generate serious money from the frenzy so far. But market researcher IDC predicted that global spending on AI, including software, hardware and services for AI-centric systems will reach $154 billion this year, up 27% from a year ago. That total could zoom above $300 billion by 2026.

Also read: One year after its launch, ChatGPT has succeeded in igniting a new era in tech

And AI isn’t only impacting the corporate world. The technology is already affecting our daily lives, and it will have even deeper effects going forward. Chatbots are getting smarter on websites, facilitating better customer service. They’re starting to alter the workplace as well, spitting out mostly coherent marketing copy, research and even, gasp, news articles — albeit with plenty of errors.

At first, ChatGPT seemed like a fun way to kill time or get homework help, but the chatbot and its ilk will seriously alter the working world, helping to eliminate perhaps millions of jobs. Morgan Stanley recently predicted that more than 40% of occupations will be affected by generative AI in the next three years.

Altman himself has been the face of OpenAI in the past year. He’s talked up the technology, but he also appeared at congressional hearings in May to discuss potential regulation of AI, testifying that “if this technology goes wrong, it can go quite wrong.” His recent firing and quick rehiring by OpenAI and its small, nonprofit board late last month fueled a veritable media storm before the Thanksgiving holiday in the U.S.

Time chooses its persons of the year for their impact, not because they’re saints. And Altman’s own story is not without controversy. The recent brouhaha over his leadership of OpenAI is believed to have been caused by a deep schism over the ethics of AI development. The board seemingly wanted more guardrails and precautions, and feared that rushed development could irrevocably doom mankind.

Read in the Wall Street Journal: How effective altruism split Silicon Valley and fueled the blowup at OpenAI

Altman, who also wooed Microsoft Corp.
MSFT,
-1.43%
to become an investor in OpenAI, emerged the victor in the upheaval with his own company’s altruistic board. Had Altman truly been fired from OpenAI, Microsoft was planning to hire him, and nearly every employee at OpenAI was ready to quit and follow him there. While OpenAI faces plenty of competition, including from Alphabet Inc.’s
GOOG,
-2.02%

GOOGL,
-1.96%
Google, Altman should continue to be the face of AI development, for good and for bad, even as he has advocated industry regulation.

The debut and influence of ChatGPT and follow-on AI products are having the biggest impact on tech development since the invention of the iPhone. Altman is at the center of it and leading the charge. Whether he can keep the lid on Pandora’s Box or not depends on many factors, but he and the company he leads are clearly driving a new tech movement that affects us all, whether we like it or not.

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December 4, 2023

Tag: computers

Watch for a “head fake”

The long-term case for quality

Looking ahead for quality… or not

Biggest price increases among the S&P 500