Top Rated Stocks To Watch This Week - March 18, 2024
In the stock market where opportunities and risks coexist, stock selection is of paramount importance for every smart investor. Here, we have some very good investment opportunities that can assist investors. Combines fundamental analysis and quantitative screens to uncover promising companies that have the potential to become market leaders.
Additions
As we delve into this week's top-rated stocks, we find ourselves in a complex landscape marked by regulatory challenges, geopolitical tensions, and technological advancements. Two giants in the tech industry, Apple (AAPL) and Oracle (ORCL), alongside the beauty retail powerhouse Ulta Beauty (ULTA), have caught our attention with their recent performances and strategic moves.
1. Apple Inc. (AAPL): Navigating Through Headwinds with Resilience
Apple has been under considerable pressure, with its shares down 11% year to date. The company is grappling with a series of challenges, including a slowdown in China, regulatory scrutiny in the European Union, and a perceived lag in the AI space. The stock recently hit its lowest level since early November, raising questions about its ability to hold critical support levels.
Despite these headwinds, Apple reported a slight increase in overall sales year-over-year, driven by strength in iPhones and services. However, concerns loom over the softer guidance for the March quarter, with expected sales down 5% year-over-year. The company's geographical and technological diversification, along with its robust ecosystem, continues to offer a cushion against the softening iPhone sales in China.
Looking ahead, Apple's prospects seem promising with the upcoming Vision Pro and Gen AI products, which could drive growth and enhance shareholder value. The company's ability to innovate and adapt to changing market dynamics will be crucial in navigating through the challenges ahead. Click here to view the article.
2. Oracle Corporation (ORCL): Capitalizing on the AI Boom
Oracle reported strong Q3 earnings, with a notable performance in its cloud revenue, which grew by 25%. The company's success in transitioning its clients to its Gen2 cloud and notable wins in the large cap space have driven the stock higher. Oracle's cloud infrastructure revenue surged by an impressive 49%, reflecting its strong position in the cloud market.
The demand for Oracle's Gen2 AI infrastructure far exceeds supply, prompting the company to expand its cloud data centers rapidly. The company's new healthcare offerings, following the acquisition of Cerner, are expected to drive significant growth in the coming years. Oracle's guidance for the fourth quarter indicates continued growth in total revenue and cloud revenue. Click here to view the article.
3. Ulta Beauty Inc. (ULTA): Expanding Horizons with a Conservative Outlook
Ulta Beauty reported its fourth-quarter earnings, surpassing expectations but issuing a mixed outlook for fiscal year 2024. The company's EPS and revenue growth were commendable, with comparable sales growth standing at 2.5%. However, the conservative guidance for FY24, aligning with Ulta's typical practices, has led to some disappointment among investors.
The company's plan to expand into the Mexican market through a joint venture with Axo in 2025 is seen as a positive move by analysts. Ulta Beauty's strong loyalty program, social media presence, diversified portfolio, and innovation initiatives continue to make it an attractive investment opportunity. Despite the initial stock decline following the earnings report, analysts remain optimistic about the company's long-term prospects. Click here to view the article.
Delletions
There are several deletions this week: SMCI, ARM, TGT
Last Week's Best Performing Stocks
1. Advanced Micro Devices, Inc. (AMD): A Semiconductor Powerhouse with AI Ambitions
AMD has risen 49% since selection.
AMD has been a prominent player in the semiconductor industry, with a 43.61% increase in revenue in 2022. However, a 58.25% decrease in earnings raises concerns about profitability and cost management. The company's forward P/E ratio of 31.85 suggests a premium valuation, reflecting its growth potential in high-growth sectors like AI.
The acquisition of Nod.ai demonstrates AMD's commitment to expanding its AI capabilities, positioning it to compete with industry leader Nvidia. Despite intense competition and mixed market sentiment, AMD's focus on open AI software ecosystems and integration of Nod.ai's technology presents a clear growth strategy.
Investors should be cautious due to the significant decrease in earnings and intense competition. However, AMD's growth in revenue and strategic positioning in AI make it an attractive long-term investment for those willing to accept the risks. Click here to view the article.
2.Square, Inc. (SQ): Pioneering the Fintech Revolution
SQ has risen 19% since selection.
Square stands out in the fintech space with its diverse product lineup, including Square, Cash App, Afterpay, and TIDAL. The company has shown strong momentum, with a 19% year-over-year growth in BNPL transactions via Afterpay and a 10% increase in Gross Payment Volume (GPV) in Q3.
Cash App's growth, with 22 million monthly active users, highlights the increasing consumer adoption of digital financial solutions. Despite a challenging start to 2024, with shares down by approximately 13%, SQ's innovative approach and solid fundamentals present a compelling case for investors.
As SQ prepares to release its Q4 earnings, investors should focus on updated forecasts for adjusted EBITDA and operating income. The consensus of a Moderate Buy rating among analysts suggests a robust market positioning, making SQ an attractive investment opportunity in the digital finance landscape. Click here to view the article.
3.Palo Alto Networks: Navigating the Cybersecurity Landscape
PANW has risen 8% since selection.
Palo Alto Networks recently reported its fiscal Q2 results, surpassing EPS expectations but with revenues in line with forecasts. The company's guidance for FY24 revenues and billings outlook was below expectations, leading to a decline in shares.
Despite the disappointing outlook, the company's total revenue grew 19% year-over-year, and its non-GAAP operating margin expanded significantly. For the fiscal third quarter, Palo Alto Networks expects total billings growth of between 2% and 4% and total revenue growth of between 13% and 15%.
Investors should closely monitor the company's ability to maintain strong profitability margins and generate strong cash flows. The recent performance and outlook may keep participants cautious, especially in light of the upcoming NVDA numbers. Click here to view the article.
Summary
Top Rated Stocks is savvy investor's proprietary quantitative system designed to uncover small, fast-growing companies that have the potential to become market leaders.
If you're new to this page, each Monday we publish an updated list of the growth stocks in the market. In-house focus list of the most compelling investment and trading opportunities in the eyes of savvy analytical team. Also incorporates periodic Special Situations reports on theme-based market opportunities.