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MarketBeat Week in Review – 7/10 - 7/14

Investors remain optimistic as the second-quarter earnings season kicks off. The latest readings on consumer and producer prices showed continuing moderation. Expectations for a 25-basis point increase by the Federal Reserve later this month are still in place. But, at this point, investors still believe that the Fed is near the end of its tightening cycle.  

All eyes now turn to corporate earnings. Specifically, what will they say about the health of the consumer? And do corporations believe that the economy will fall into recession at some point in the next 12 months? The early results show that investors should pay attention to pricing power. Pepsi clearly has it. Whether other companies have, it is a story to watch.  

Earnings season kicks off in earnest next week. And two of the big names to watch will be Tesla, Inc. (NASDAQ: TSLA) and Netflix, Inc. (NASDAQ: NFLX). The MarketBeat team will be on top of those earnings as we help to guide you through what continues to be an interesting market. Here are some of the most popular articles from this week.  

Articles by Jea Yu 

The U.S. government continues to offer incentives for clean energy manufacturing in the United States. But as Jea Yu writes, that hasn’t been enough to boost shares of Enphase Energy, Inc. (NASDAQ: ENPH). Analysts are concerned about the slowing pace of the company’s revenue growth. However, investors who believe that the solar energy trend is real can pick up the stock at a nice discount. 

Yu also alerted investors to Peabody Energy Co. (NYSE: BTU). The company is the nation’s largest coal producer. And despite the undeniable shift towards clean energy solutions, Yu reminds investors that coal is the third largest source of energy in the country. And coal is essential for steel manufacturing which is in demand as infrastructure spending rolls out.

And in our continuing analysis of the artificial intelligence (AI) sector, Yu outlined the opportunity in Accolade Inc. (NASDAQ; ACCD). The company is a play on both AI and healthcare which will be two of the dominant themes for the next decade.  

Articles by Thomas Hughes 

PepsiCo, Inc. (NASDAQ: PEP) reminded investors why companies that have pricing power are good investments in any economic conditions. The soft drink and snack food manufacturer beat top and bottom line estimations, and Thomas Hughes explains why the stock may be poised to hit a record high in the second half of the year.  

While Pepsi is a “steady Eddie” stock, Hughes offers up Beyond Meat, Inc. (NASDAQ: BYND) as a pick for contrarian investors. Many questions hang over the company, including its ability to turn a profit. But if the company’s shift to retail channels is successful, BYND stock could be an oversold gem.  

Hughes was also focusing on the AI sector. While most of the focus is on the big names, and rightly so, Hughes offered up three smaller companies that offer investors a chance at 2x growth.  

Articles by Sam Quirke 

Cathie Woods is not every investor’s cup of tea. As Sam Quirke writes, investing in Woods’ flagship ARKK Innovation ETF (NYSEARCA: ARKK) requires a significant amount of FOMO. Especially when interest rates are working against many of the companies that Woods favors. But investing in innovation is always about balancing risk and reward, and the ARKK fund unapologetically offers that to investors. And if the market is moving from risk-off to risk-on, hope may be a profitable short-term strategy. 

Another stock that is presenting investors with an intriguing risk-reward proposition is Palantir Technologies, Inc. (NYSE: PLTR). The stock shot higher, fueled by AI and what appears to be sustained profits. But with the stock posting triple-digit gains in the last few months, Quirke analyzes if PLTR stock still offers value.  

Quirke is more certain about the value offered by Alibaba Group Holding Limited (NYSE: BABA). After nearly dropping to an all-time low in October 2022, the stock has done a nice about-face on improving market conditions in China. And as Quirke writes, after announcing a share repurchase program, BABA stock still looks like an undervalued option for investors.  

Articles by Chris Markoch 

Oil stocks are underperforming the market in 2023. As Chris Markoch writes, that’s not uncommon after a sector was a strong performer in 2022. But with many factors likely to drive oil prices higher it’s time for investors to look at three oil stocks to buy before the price of oil takes off.  

Analyst upgrades are often a strong predictor of stock price growth, particularly if those upgrades occur before a company reports earnings. Markoch wrote about three stocks that have received upgrades heading into earnings season.  

And for investors with a more speculative appetite, Markoch was looking at the emerging space economy. And specifically, he gives investors three space stocks that could pay off for disciplined, long-term investors.  

Articles by Kate Stalter  

Semiconductor chips are part of the picks-and-shovel AI trade. Nvidia, Inc. (NASDAQ:NVDA) continues to generate significant bullish interest. However, Kate Stalter writes about the strides that Broadcom Inc. (NASDAQ: AVGO) is making with its generative AI chip. Investors looking for an alternative, or hedge against NVDA, may want to look at AVGO stock.  

As earnings season kicks off, Stalter reminds investors that earnings growth fuels stock price growth. And explosive earnings growth can send stocks much higher. That’s the case that Stalter makes for three stocks that analysts are forecasting to post triple-digit earnings growth in the next 18 months.  

Stalter was also eyeing the biotech sector and specifically the recent news regarding Gilead Sciences, Inc. (NASDAQ: GILD). Recent SEC filings show the company has made significant investments in AlloVir Inc. (NASDAQ: ALVR) and Arcus Biosciences Inc. (NYSE: RCUS). This is a common practice for large-cap biotech companies because it allows them to have access to and market the intellectual property of these companies as it expands their portfolio of drugs and therapeutics.  

Articles by Ryan Hasson 

Beaten-down stocks can be opportunities for snap-back gains. That’s a set-up that Ryan Hasson believes may be happening with PayPal, Inc. (NASDAQ: PYPL). The stock lags the market in 2023 but has posted strong gains in the last month. As Hasson writes, the technicals put PYPL stock at a key inflection point, but analysts believe the stock has upside. 

Hasson was also looking at the recent upward price movements in two EV start-ups. But as Hasson notes, shares of Rivian Automotive (NASDAQ: RIVN) and Nikola Corporation (NASDAQ: NKLA) are moving higher for different reasons. The EV sector will remain volatile, and investors need to understand what they’re investing in.  

Gene editing is emerging as a bullish opportunity for patient investors. The sector is filled with a number of small companies entering into partnerships with biotech giants. That’s the case with Pfizer Inc. (NYSE: PFE), which recently invested $25 million in Caribou Biosciences, Inc. (NASDAQ: CRBU) to help the company develop its pipeline.  

Articles by Gabriel Osorio-Mazilli 

Agriculture and food stocks have underperformed in 2023 as these businesses are sensitive to rising interest rates. However, Gabriel Osorio-Mazilli writes that this is setting up an opportunity with Tyson Foods, Inc. (NYSE: TSN), which is a high-quality stock that appears to be severely undervalued.  

Osorio-Mazilli was also looking at the recent IPO of CAVA Group (NYSE: CAVA). The stock has doubled since it started publicly trading in early July. The company’s business model and fundamentals are reminding some investors of Chipotle Mexican Grill, Inc. (NASDAQ: CMG), the fast-casual restaurant that has proven to have a stock that is impervious to macroeconomic conditions.  

This earnings season will provide investors with an update on the strength of the travel industry. As Osorio-Mazilli writes, the hotel and accommodations industry has been one of the outperformers in the sector. And analysts believe that these three hotel stocks possess upside potential that isn’t fully reflected in their respective stock prices.  

Articles by MarketBeat Staff 

Autonomous driving may not be quite ready for prime time, but as investors start to find risk-on assets more appealing, it’s fueling interest in the sector. And the MarketBeat staff writes why that’s been bullish for Aurora Innovation, Inc. (NASDAQ: AUR), which is up 131% for the year and may have a more bullish upside.  

The MarketBeat staff was also analyzing the recent news that Domino’s Pizza, Inc. (NYSE: DPZ) is partnering with Uber Technologies, Inc. (NYSE: UBER). This will allow Uber to serve as an ordering platform for Domino’s. The latter, however, will still be making the deliveries. And that makes it unclear if this is a win for either stock.  

Investors are clearer about the bullish possibilities for Generac Holdings Inc. (NYSE: GNRC). The stock is up 16% in 2023. And with the nation now in hurricane season and many areas experiencing record high temperatures, the company may have several catalysts to remind homeowners of why a whole-home generator is a smart investment. And why GNRC stock may be a smart investment for investors.  

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