Chips and blockchains and vaccines, oh my!
Every week, we round up the stocks that are trending, noteworthy, and rated “Top” by our AI – be they shorts or buys, as long as there’s potential for returns, we’re happy. This week, we’ve identified a number of trending stocks in the health and tech space with the help of Forbes AI Investor.
Q.ai runs daily factor models 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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Moderna, Inc (MRNA)
Moderna closed at $162.84 on Wednesday, a 6% shift down with a trade volume of nearly 19 million after seesawing for most of the day. The sudden plummet came on the back of the Biden administration’s announcement that they would support a proposal to temporarily waive COVID-19 vaccine patent protections to the World Trade Organization.
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U.S. Trade Representative Katherine Tai sent out at statement on the extraordinary measuring, stating that, while the Biden Administration “believes strongly in intellectual property protections,” something had to be done “in service of ending this pandemic.” The news comes at a time when India is seeing hundreds of deaths per day due to COVID-19, with many other nations struggling, as well.
Moderna may be down on this recent news, but their chart reflects the six-month seesaw the pharmaceutical company has ridden anyway, and recent numbers aren’t much better. Their 10-day price average sits just below $176, while their 22-day price average is markedly lower, at $162. Still, the company’s performance after the release of their mRNA COVID-19 has left the company trading up almost 56% YTD.
And it’s not just their stock that’s performing well overall – the company’s balance sheet is solid, as well. Revenue exploded by 240% over the last year and almost 1,923% in the last three, bringing total revenue from $135 million to over $803 million. Their operating income saw smaller, but still significant, growth, from $413 million to $763 million in the same timeframe.
The company is projecting good things for its future, too, with forward revenue expected to grow over 9.5% in the next twelve months. However, their forward 12-month P/E currently sits at 4.83, suggesting slow growth for their stock prices.
Q.ai’s AI believes that Moderna’s stock is set for limited market potential, as well, as the company is currently rated B in Growth and D’s in Technicals, Low Volatility Momentum, and Quality Value.
Canaan, Inc (CAN)
Canaan, Inc closed up 2.7% on Wednesday to $12.12 per share, ending with a volume of 6.5 million trades. The stock has been on the downtrend since mid-March and has continued falling from both its 22- and 10-day price averages of $14.28 and $13.26. Still, for a relatively cheap stock, a little wiggle room makes a big difference, and the company is up over 104% YTD.
If you haven’t heard of Canaan Creative, Inc, until now take heart: you’re not alone. This China-based computer hardware manufacturer has only been on the scene since 2013, giving it less than a decade to build a big name around blockchain services and ASIC microprocessors for bitcoin mining.
Still, their stock is trending this week, as the company announced the closing of its registered direct offering in American Depository Shares (ADS), totally $170 million. Canaan intends to use the proceeds from this recent round of capital fundraising for research, development, and production expansion in its AI chips, AI algorithms, and blockchain services.
The pandemic has hit Canaan fairly hard in its revenue stream, down from $2.7 billion three years ago to $447.7 million in the last fiscal year.
Still, that hasn’t stopped the company from increasing its operating income to $253.9 million, and its EPS is up from $0.93 to $1.38 – not bad for a small tech company. And at the same time, Canaan’s ROE has skyrocketed from 22% three years ago to over 38% in the last year.
That said, our AI is dubious of Canaan – in fact, without enough relevant information, we aren’t offering speculation on its Growth potential. The rest of the company’s scores don’t look so hot, either, with a C in Technicals and D’s in Low Volatility Momentum and Quality Value. For now, Canaan is an investment you make at your own risk.
International Business Machines Corporation (IBM)
IBM IBM ticked down 0.36% on Wednesday to $145.22 per share at a trading volume of 3.6 million. Though the stock has seen some turbulence in the last year, on the whole it appears to be moving upward, as reflected in the increase in price between the 22-day $139 average and the 10-day $143 average. Overall, IBM is up over 15% YTD.
IBM is poised to close the week even higher, as the company just announced the world’s first 2-nanometer (nm) chip-making technology. The company expects the chips – which may be released as soon as 2024 – to imbue tech with massive performance gains in battery life and power compared to current 5-7nm processors.
This has major implications for everything from massive data centers to the smallest smartphone, as the chips have the capacity to reduce power needs by 45% and extend battery life by up to 75%.
Or, in everyday terms, the average iPhone would last 4 days without a charge. Phew!
Though IBM is trending now – and for good reason – the chip maker reported a relatively lackluster 2020, with revenue growing by 0.2% to $73.6 billion. Despite the globe moving to online work, play, and learning in the last year, the company is still down from its $79.6 billion revenue three years ago. And there’s little expected room for growth in the next twelve months, with forward revenue growth set at 0.57%.
At the same time, EPS and ROE have both fallen over the last three years to $6.23 (from $9.52) and 26.4% (from 50.3%), respectively. However, IBM’s operating income expanded by nearly 5.9% last year to $8.58 billion against its three-year ago operating income of $1.3 billion.
Still, with a revenue stream over $70 billion and brand-new technology on the horizon, IBM stock is far from a lost cause. In fact, the company is projecting a forward 12-month P/E of 13.13. And our AI sees plenty of potential, as well, having graded IBM with B’s in Low Volatility Momentum and Quality Value and C’s in Technicals and Growth.
Square, Inc (SQ)
Square, Inc SQ ticked up just under 0.3% on Wednesday to $231.87 per share, with a total trade volume just below 3.8 million. The stock has been slipping steadily over the past month, as evidenced in the 22- and 10-day price averages of $250 and $245, respectively, though it’s still up over 6.5% YTD. (Though that’s nothing compared to its YOY performance, as you can see in the chart below.)
Square, too, may be poised to end the week on a better note than its midweek middling, as the company’s Q1 fiscal earnings blew Wall Street’s expectations out of the water. The company’s quarterly revenue is up 266% YOY to $5 billion, with net income rising to $39 million and gross profit expanding by $79% YOY.
But the real ringer is Square’s bitcoin revenue, up 11 times YOY to $3.5 billion (though its gross bitcoin profit sat at 2% of its revenue, or $75 million). During the company’s earnings call, CEO Jack Dorsey – of Twitter fame – stated that bitcoin has the potential to be the internet’s native currency, as it “removes a bunch of friction for our business.”
While the future of bitcoin on the internet is still uncertain as political talks abound, this most recent quarterly report seems to expound upon Square’s performance over the past three years.
In total, revenue has exploded by nearly 188% in the past 36 months, from $3.3 billion to nearly $9.5 billion, though operating income has shrunk by almost half – $36 million to $18 million. EPS is up, too, from $0.09 to $0.44, while ROE has grown from 4% to 9.7%.
And if that weren’t enough, Square is trading with a whopping forward 12-month PE of 179.5.
However, our AI is wary that there’s more to Square than initially meets the eye. While the company received a B in Growth potential and a C in Technicals, it earned resounding D’s in Low Volatility Momentum and Quality Value. As such, Square is definitely an investment to watch – but it might not offer the full bang for your buck.
Upland Software, Inc (UPLD)
Upland Software closed down almost 2% on Wednesday, ending the midweek at $46.61 per share as its Q1 revenue and guidance fell in line with Wall Street estimates.
The company has shown jagged performance for most of 2021, with prices continually fluctuating as seen in the contrast between the 10- and 22-day price averages ($49.52 and $48.72, respectively). The stock is up almost 1.6% YTD.
Upland Software is an enterprise-sized, Texas-based software company that works with big names like PepsiCo PEP , Western Union WU , and Frontier Airlines. They provide a variety of services, ranging from telecom to cloud-based fax to account planning software.
While Upland’s most recent quarter showed a 9% improvement in revenue and increases in subscriptions, acquisitions, and expanded relationships, the past year’s fiscal performance has been slightly less impressive.
For instance, revenue grew by barely 2% for $292 million – compared to $150 million three years ago – with the next twelve months looking to grow by 1.55%. And while EPS and ROE have both grown over the last three years, the company’s operating income has fallen from $13 million to $3.26 million.
Despite the tech company’s relatively slow growth, our AI sees plenty of promise in Upland Software. To start, they’re currently trading with a forward 12-month P/E of 21.05.
Not to mention, our artificial intelligence has ranked them above average, with C’s in Growth and Quality Value and A’s in both Technicals and Low Volatility Momentum.
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