Last week proved to be a banner week not just for the stock market, but the broader economy as well (at least comparatively). The June jobs report released by the Labor Department showed that 850,000 jobs were added to nonfarm payrolls last month, with hourly wages ticking up 0.3% for the month and 3.6% YOY.
Thanks to this string of positive economic reports, stocks rose again Friday, with the S&P 500 and Nasdaq Composite both reaching record highs, and the Dow Jones Industrial Average climbing 1% for the week.
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The Boeing Company (BA)
The Boeing Company slipped 1.3% Friday to $236.58 per share, closing out the day on the back of 15.7 million trades. The stock is sitting $9 below the 22-day price average, though it remains up 10.6% YTD. Boeing is trading at 166.8x forward earnings.
Boeing’s stock has been trending almost nonstop since the first deadly 777 MAX crash in 2018 saw that model’s flights grounded indefinitely, followed soon thereafter by a worldwide pandemic that grounded the majority of flights, period. Unfortunately, Boeing is trending yet again due to a crash – albeit a non-lethal one.
On 2 July 2021, the U.S. Coast Guard and Honolulu Fire Department responded to an emergency water landing of a Boeing 737-200 cargo plane after the two-person crew reported engine troubles. Boeing’s stock dipped on the day as the incident brings to light yet another potential roadblock on its road to recovery.
On Monday, the company helped the U.S. National Transportation Safety Board in its search for the downed plane in the hopes of recovering cockpit voice and flight data recorders.
Unfortunately, the last three fiscal years have not been kind to Boeing’s bottom line. The company’s revenue has been slashed in half from $101 billion to $58 billion, while operating income is down to $8.66 billion from $11.8 billion. That said, per-share earnings are actually up in the period from $17.85 to $20.88.
Currently, Boeing is expected to see 8.3% revenue growth in the next 12 months. Our AI rates the (in)famous airplane manufacturer C in Growth, D in Technicals, and F in Low Volatility Momentum and Quality Value.
Advanced Micro Devices, Inc (AMD)
Advanced Micro Devices, Inc closed up 1.5% Friday to $94.70 on the back of over 51.3 million trades. The stock is up $10 compared to the 22-day price average and 3.3% YTD. Currently, AMD is trading at 43.9x forward earnings.
AMD is trending in relation to the company’s upcoming acquisition of Xilinx, which recently cleared a crucial regulatory hurdle when the European Commission gave the company the go-ahead for the $35 billion deal to proceed. The companies first reported the bid last October, with shareholders approving the deal this past April.
If all goes well, the acquisition will help AMD round out its robust portfolio and make headway in the data center, aerospace, and defense sectors, among others. A recent Bank of America report on the potential for the semiconductor segment to grow up to 20% in 2021 also pushed this popular stock back into the limelight.
Over the last three fiscal years, AMD saw revenue growth of 76.4% to $9.76 billion compared to $6.5 billion. Meanwhile, operating income has soared 314.4% in the same period to $1.37 billion compared to just $451 million, and EPS has ballooned an astronomical 644% from 32 cents to $2.06. In the same period, return on equity leapt from 36.2% to 57.5%.
All told, forward 12-month revenue is expected to expand around 2.1%. Our AI rates AMD as a prospect for another time, with an A in Growth, Cs in Low Volatility Momentum and Quality Value, and a D in Technicals.
Moderna, Inc (MRNA)
Moderna, Inc nipped down 0.3% to $234.30 per share on Friday, closing out the end of the week at 4.2 million trades. The stock is up substantially from the 22-day price average of $215 and change and remains up 124.3% YTD. Currently, Moderna is trading at 8.5x forward earnings.
Moderna’s stock is trending yet again after the latest clinical studies found that its groundbreaking mRNA vaccine shows promise against the highly contagious delta variant of Covid-19, among others. The two-dose vaccination also produced neutralizing antibodies against variants that first cropped up in South Africa and Nigeria, as well.
In the last three fiscal years, Moderna’s revenue has shot up 1,923% to $803.4 million compared to just $135 million three years ago. Operating income, too, has seen significant gains, with the most recent fiscal year coming in at $763 million compared to $413 million. However, per-share earnings have plummeted from $4.95 to just $1.96.
Moderna’s 12-month revenue is expected to grow an astonishing 17%. That said, our AI rates this stock as a poor investment at this time, with a B in Quality Value, C in Technicals, D in Low Volatility Momentum, and an F in Growth.
Microsoft Corporation (MSFT)
Microsoft Corporation closed up 2.2% Friday to $277.65 on the back of 26.5 million shares. The stock is up almost 25% YTD and is trading at 34.4x forward earnings.
Microsoft made history last week as only the second U.S. corporation to reach a valuation of $2 trillion, trailing years behind Apple in that honor. The milestone came on the back of its banner pandemic year, which bolstered demand for the company’s communication and cornerstone tech offerings – as well as the first substantial Windows update in over half a decade.
The company also trended last week after AT&T announced that it will migrate its 5G mobile network to Microsoft’s cloud platform, Microsoft Azure. In addition to boosting AT&T’s operational efficiency, Microsoft will purchase the telecom giant’s carrier-grade Network Cloud platform and engineering and lifecycle management software.
In the last three fiscal years, Microsoft’s revenue leapt almost 45% to $143 billion compared to $110 billion three years ago. Meanwhile, operating income surged 83.2% from $35 billion to $53 billion, while per-share earnings ballooned 244.5% from $2.13 to $5.76 in the period. Additionally, return on equity over doubled to 40.1% in the last fiscal year.
Over the next 12 months, Microsoft’s revenue is expected to grow around 8.7%. Our AI rates this tech giant in a positive light, with As in Low Volatility Momentum and Quality Value and Bs in Technicals and Growth.
Nike, Inc (NKE)
Nike, Inc closed up 1.1% Friday, ending the day at $159.74 per share with 6.4 million trades on the books. The stock is up significantly over its 22-day price average of $138 and change and 13% YTD. Currently, Nike is trading with a forward 12-month P/E of 37.1x.
Nike is trending after the athleticwear retailer released its Q4 2021 earnings report two weeks ago. The company traded up 15.5% the day it dropped after revealing a full-year forecast of $50 billion.
Additionally, during the three-month period, Nike’s total revenue nearly doubled to $12.3 billion YOY, with North American sales alone hitting a record $5.4 billion. In the aftermath, over a dozen brokerages raised their price targets on Nike’s shares.
In the last three fiscal years, Nike’s revenue grew almost 14% to $44.5 billion compared to $39.1 billion, while operating income jumped over 50.8% to $7.2 billion compared to $4.77 billion. Meanwhile, per-share earnings leapt 43% to $3.56 in the last fiscal year compared to $2.49 three years ago, with return on equity rising to 55%.
Currently, Nike is rated just above average by our AI, with a B in Low Volatility Momentum and Cs in Technicals, Growth, and Quality Value.
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