Broadcom
Shares of Broadcom (AVGO) finished Wednesday’s trading almost 12% higher following Advanced Micro Devices (AMD) positive earnings report last night.
Broadcom was the second-best performer in the semiconductor space – behind shares of NVIDIA (NVDA) which finished the day almost 13% higher – as investors rushed back into the semiconductor chip stocks after the sector dropped almost 20% in the last 14 trading days.
The move back into the semis was sparked by comments from Microsoft’s conference call signaling that large cap technology companies were in an race to buy as many AI chips as necessary to keep on the cutting edge of the AI boom.
Broadcom is slated to announce their earnings results on August 29, the day after NVIDIA. The company recently raised their revenue expectations for the upcoming report. This is the first time that the company has done so since June 2023, creating a possible FOMO trade for the stock.
Shares closed above their bullish 50-day moving average and just below the stock’s 20-day trendline.
A move above $163 will push the stock above its 20-day moving average, a trendline that held the stock from moving higher just a week ago.
Shares of Broadcom remain bullish over the short-term outlook with a target of $190.
Meta
Meta (META) shares are rallying back towards a critical price break after the company reported earnings and revenue that beat analysts’ expectations.
The social media giant stock is trading almost 5% higher after handily beating revenue guidance, resulting in earnings per share that were $0.44 higher than Wall Street’s expectations.
Last quarter, Meta’s management increased their capital expenditure and they’ve done so again as the earnings report stated that “While we continue to refine our plans for next year, we currently expect significant capital expenditures growth in 2025 as we invest to support our artificial intelligence research and product development efforts.”
Mark Zuckerberg made it clear last week that Meta and other AI companies would continue investing heavily in AI chips “Because the downside of being behind is that you’re out of position for like the most important technology for the next 10 to 15 years,”.
Meta’s quarterly report also revealed a loss of $4.5 billion as the company continues to drive money into the development of the Metaverse. The augmented reality project has lost upwards of $50 billion since its announcement in 2020 as it continues to be the foundation for what Mark Zuckerberg believes will be the future of personal computing.
Meta stock faces staunch technical resistance at $490.
This price is the confluence of the stock’s bearish 20-day and neutral 50-day moving averages. Meta’s 20-day moving average is in the process of moving below its 50-day trendline, a technical development that is normally bearish for the short-term outlook of a stock.
The time META saw this technical formation was on April 30, just days after the 16% selloff of the company’s stock after its last earnings report. After that, META stock rallied more than 25% into its July 8 highs.
A successful move above $500 will attract technical buyers after today’s positive earnings report.
META remains a long-term buy with a target of $550.
Cameo Corp.
Cameo (CCJ) – the world’s second largest uranium producer – rallied more than 1% today despite missing both top and bottom-line earnings figures earlier today.
Revenue for the energy company was $598 million compared to estimates of $756, a miss of 20%. Despite the miss, revenue for the year grew 24.1%. Bottom line earnings per share came in $0.14 below analyst expectations of $0.25.
Setting the earnings miss aside, shares of Cameo have attracted buyers in the recent six months as interest in uranium companies has been on the rise. The reason rests in talks of nuclear energy gaining traction as energy companies look for ways to increase energy generation through nuclear power plants.
On Wednesday, Analysts at Cantor-Fitzgerald became the latest to upgrade shares of Cameo to a “buy” recommendation.
In May, the White House signaled potential support of the growth of nuclear power in the United States (Reuters Story).
Cameo shares are 30% higher over the last year on renewed interest in nuclear energy.
The stock Crossed below its long-term 200-day moving average last week, then found support at $45. That $45 level is the site of significant put option activity, a sign that the market’s speculators see the stock moving lower.
With the political season heating up, investors should expect that Cameo will take its lead from poll results given the two parties’ clear difference on energy policies.
As a result, expect Cameo to maintain a neutral outlook through November with high return potential should the Democrats win the White House.
Cameo remains a long-term bullish stock with a price target of $65.
