The Dow Jones Industrial Average finally closed above 35,000 for the first time on Friday after flirting near the line repeatedly for weeks. Likewise, the S&P 500 and Nasdaq Composite continued their upward climb to close at record highs once again as all three stock charts move into uncharted territories. However, Dow futures dropped Monday as Hong Kong and China-based stocks plunged amid concerns on various governmental crackdowns, including on for-profit tutoring, property market concerns, and big tech companies.
On the homefront, U.S. senators hoped to seal a bipartisan infrastructure deal as soon as Monday, but fresh squabbles erupted between the two sides of the political aisle, pushing back the signing date once again. Meanwhile, the 10-year Treasury yield slipped Monday, while a report dropped that sales of new U.S. single-family homes dropped 6.6% in June to 670,000 units (seasonally-adjusted), compared to the nearly 800,000 expected.
These moves set the stage for what’s sure to be a busy week, as the Federal Reserve’s two-day July meeting is set to kick off on Tuesday. Investors will be looking in the session for signs of tightening monetary policy and indicators on how the central bank will address rising inflation concerns. These meetings will underscore a week packed Wall-to-Street with earnings reports from major tech companies such as Apple
And with that said, let’s dive into today’s list of trending stocks, courtesy of Q.ai’s artificial intelligence algorithm.
Q.ai runs factor models daily to get the most up-to-date reading on stocks and ETFs. Our deep-learning algorithms use Artificial Intelligence (AI) technology to provide an in-depth, intelligence-based look at a company – so you don’t have to do the digging yourself.
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The Boeing Company (BA)
The Boeing Company
Boeing’s stock price is on the up-and-up after months of getting in its own way following the resumption of domestic 737 MAX flights in late 2020. The manufacturer has been plagued by reports of cancelled orders, FAA delays, a cargo plane crash, and avionics and electrical issues in some of its lines, as well as a production-related structural defect that saw management slash Dreamliner production.
While these incidents have admittedly marred the company’s profile, a series of new orders and reaffirmed partnerships between Boeing and some airliners appeared to put the stock on the uptick again. And as relaxed Covid-19 restrictions boost global travel, some investors are hopeful heading into this week, as Boeing is expected to report its Q2 earnings on Wednesday amidst a slew of tech giants.
Let’s hope for Boeing’s sake that investor optimism is not misplaced. Over the last three fiscal years, Boeing’s revenue plummeted from $101 billion to $58 billion, while operating income plunged similarly from $11.8 billion to $8.7 billion. Meanwhile, per-share earnings actually grew from $17.85 to $20.88.
Currently, Boeing is expected to see 12-month revenue growth around 8.3%. Our AI rates this airplane manufacturer C in Growth, D in Technicals, and F in Low Volatility Momentum and Quality Value.
Schrödinger, Inc. (SDGR)
Schrödinger is an American life sciences and materials company first founded in 1990. The company develops software for computational chemistry, drawing upon a deep understanding of physics, chemistry, and predictive modeling to accelerate chemical innovation and discover novel molecules.
Their computer-based approach to chemistry means that Schrödinger commands an extensive pipeline of collaborative and internal drug discovery programs. And while no exciting discoveries have landed Schrödinger on this list, it’s likely that the current furor around earnings season has increased overall excitement for their upcoming 15 August Q2 report.
Over the last three fiscal years, Schrödinger’s performance has increased overall, though the company only went public last February. For instance, revenue increased 71.1% to $108 million compared to $66.6 million as their operating income leapt 161%, rising from almost $28 million to $60.9 million. Moreover, Schrödinger’s per-share earnings came in at $0.41 in the last fiscal year, while return on equity settled around 7.4%.
All told, Schrödinger is expected to see around 4% revenue growth in the next 12 months. Our AI rates this life sciences company below average, with a B in Technicals, Cs in Growth and Quality Value, and a D in Low Volatility Momentum.
Facebook, Inc. (FB)
Facebook is trending as investors anticipate a stellar Q2 earnings report on Wednesday compared to last year’s abysmal metrics. With YOY expectations high, the social media giant should enjoy an easy comparison that will impress the market and drive its bloated stock price even higher. Wall Street expectations are set around $27.8 billion in revenue and $3.02 in per-share earnings, though Facebook declined to issue specific guidance for the quarter.
That said, Facebook may also have to grapple with some challenges and changes in its upcoming quarterly report as accusations mount over privacy, monopoly, and misinformation concerns. Moreover, CEO Mark Zuckerberg himself has said that Facebook has fallen behind social streaming platforms such as YouTube and TikTok in attracting new creators, and Apple’s recent upgrades in user privacy may cut into Facebook’s advertisement bottom line.
But it’s unlikely that Facebook will have a bad quarter, per se, nor a bad year. Over the last three fiscal years, the social media giant’s revenue accelerated 69% to nearly $86 billion compared to $55.8 billion while operating income leapt 53% to $32.7 billion compared to $24.9 billion. Meanwhile, EPS gained a substantial 54% to end the last year at $10.09.
All told, Facebook is expected to see around 3.9% revenue growth in the next year. Our AI rates the company solidly overall, with Bs across the board in Technicals, Growth, Low Volatility Momentum, and Quality Value.
Nike, Inc. (NKE)
Nike has been trending for much of the last year, though its current role can be at least partly attributed to its fourth-quarter fiscal earnings report on 24 June. The company posted stellar revenues of $12.3 billion on the quarter and full-year revenue of $44.5 billion, with diluted EPS coming in at 93 cents for the quarter and $3.56 for the fiscal 12 months.
However, Nike’s good fortunes may take a slight dip in the coming weeks after several key Vietnam production factories were hit by a recent Covid-19 outbreak. As around half of Nike’s shoes were manufactured in Vietnam in the last financial year, the spreading virus may dent the athleticwear giant’s supply chain (though the company has declined to comment on the matter).
Over the last three fiscal years, Nike’s revenue has risen from $39.1 billion to $44.5 billion, with operating income climbing to $7.2 billion compared to $4.77 billion. Additionally, per-share earnings jumped almost 43% to $3.56 compared to $2.49 as ROE jumped from 42.7% to 55%.
Currently, our AI rates Nike as a mediocre investment at this time, with a B in Low Volatility Momentum and Cs in Technicals, Growth, and Quality Value.
General Motors Company (GM)
General Motors Company
GM has trended this year thanks to renewed interest in auto sales, as well as the semiconductor shortage driving up prices of vehicles new and used. And thanks to the shortage of vehicles for sale, GM, as well as companies Honda and Acura, are altering their vehicle leasing arrangements to accommodate new buyers – potentially at the expense of current customers.
Instead of allowing leasing customers to sell their vehicle to any purchaser in the market, anyone leasing the GM brand will have to return their vehicle to a same-brand dealership when their lease expires. This change was instituted on 1 July, largely instigated by the chip shortage and other supply chain factors. The company claims that preventing lessees from selling out to third parties ensures they’ll be able to meet strong vehicle demand (while, assuredly, protecting their bottom line in a hot market).
GM will hold its next earnings call on 4 August 2021.
Over the last three fiscal years, GM’s revenue has dropped from $147 billion to $122.5 billion, while per-share earnings dropped over a dollar to $4.33 and return on equity plunged from 20.5% to 13.2%. That said, operating income actually rose in the three-year period from $6.3 billion to $8.56 billion.
Currently, GM is expected to experience around 4.5% revenue growth in the next 12 months. Our AI rates this automaker poorly, with Cs in Growth and Quality Value, a D in Low Volatility Momentum, and an F in Technicals.
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