Category Archives: Technology

Two Smartphone Makers Nipping at Apple’s Heels

Here is something that may startle you and it’s a subject I will cover in a future issue of Growth Stock Advisor for my subscribers:

A research paper by Professor Hendrik Bessembinder, published in the September edition of the Journal of Financial Economics, posed this question “Do Stocks Outperform Treasury Bills?”. The end result was some rather worrying conclusions for equity investors.

He studied stock returns from 1926 through 2016 and found that out of the universe of 25,967 U.S. stocks in the study, just five companies account for 10% of the total wealth creation over the 90 years, and just over 4% of the companies account for all of the wealth created!

In other words, you need to find the winners over the long-term to be a successful investor.

Apple Stock Selloff

Up until now one of those long-term winners had to be Apple (Nasdaq: AAPL). But some are beginning to question that assumption for the world’s most valuable company.

That can be seen in its recent price action taking it out of the exclusive trillion dollar valuation club. Apple shares, prior to last week, were in the longest weekly streak since November 2012 and had its biggest two-day drop since January 2013. The drop was fanned by twin pieces of negative news…

First, the Nikkei Asian Review reported the company had asked contractors Foxconn and Pegatron to halt plans to ramp up production of the new XR model. That report came just days after Apple gave a disappointing outlook for the upcoming holiday season and, most importantly for me, Apple said it would stop reporting unit sales for iPhones, iPads and Macs. That fanned concerns that demand for the company’s smartphones may have peaked.

 Production Slowdown

Let me tell you first about what the Nikkei reported about Apple cutting its production of the new iPhone XR. This relatively ‘cheap’ iPhone model only hit the shelves in October.

Foxconn had prepared nearly 60 assembly lines for Apple’s XR model, but was recently using only about45 production lines as Apple told it not to manufacture as many XRs as previously planned. That means Foxconn would produce around 100,000 fewer units daily to reflect the new demand outlook. The new production figure is down 20% to 25% from the original optimistic outlook.

Fellow Taiwanese manufacturer Pegatron faces a similar situation, suspending plans to ramp up production and awaiting further instructions from Apple. Apple also had asked smaller iPhone assembler Wistron to stand by for rush orders, but supply chain sources told the Nikkei the company will now receive no orders for the iPhone XR this holiday season.

Apple had great expectations that the iPhone XR would jump-start shipments this year. This lower-cost model debuted alongside the iPhone XS and top-of-the-line XS Max. But now, Apple instead is requesting more of the older iPhone 8 and iPhone 8 Plus models, which are up to 20% cheaper than the XR’s starting price of $749. Apple previously planned 20 million units for the older iPhone models this quarter, but raised that figure by 25% to 25 million units.

The moves to add orders for year-old iPhone models, while suspending extra production for the latest product, may be pointing to Apple’s lack of innovation regarding phones.

Adding to the news coming out of Asia was news from Apple supplier, Lumentum Holdings pointing to slowing iPhone sales. Although Lumentum did not identify Apple per se, it is best known as a major supplier of 3D sensors that power the facial recognition technology on Apple’s latest iPhones.

The company’s CEO Alan Lowe said, “We recently received a request from one of our largest industrial and consumer customers for laser diodes for 3D sensing to materially reduce shipments to them during our fiscal second quarter for previously placed orders that were originally scheduled for delivery during the quarter.”

For me though, there is an even bigger red flag waving…

Apple Becoming Opaque

In a stunning move, the world’s most valuable company said it will no longer tell investors and analysts how many iPhones, iPads or Macs it sells each quarter. Its finance chief Luca Maestri insisted that a “unit of sale is less relevant today than it was in the past”. Apple will now only disclose its dollar revenues and cost of sales for each device category every quarter instead of detailing the number of units shipped down to the nearest thousand.

Maestri told analysts: “I can reassure you that it is our objective to grow unit sales for every product category that we have.” I suspect though that he was shoveling some manure there. The smartphone market seems to have peaked globally. Apple has only managed to maintain its revenue growth by increasing prices, first with the $1,000 iPhone X and then again in September with the $1,100 iPhone XS Max.

The most recent figures show the success of this strategy. The average selling price of an iPhone increased from $618 a year ago to $793 in the latest quarter. That drove Apple’s iPhone revenues up by 29%, even though unit volumes were flat compared to the same period a year ago. Data from the research firm IDC showed that Apple’s combined iPhone shipments grew a mere 1.37% in the first nine months of 2018.

Apple’s Emerging Problem

Getting back to the company’s weak forward guidance, CEO Tim Cook blamed a handful of emerging markets, including Turkey, India, Brazil and Russia, for its weaker outlook on holiday sales. Sales in India were flat year on year while Brazil fell.

The bottom line is that Apple’s phones are just too darn expensive for most consumers in the emerging world. And even where pricing is less of an obstacle – in China – Apple faces other challenges.

Apple shareholders are well aware that China is Apple’s second-biggest market after the U.S. And it has been a major source of growth for Apple in recent years. China itself is responsible for 13% of overall revenues, with the Greater China region accounting for 18% of Apple’s revenues. However, that figure is down from 20% just a quarter ago.

I don’t think the trade war is the culprit, yet. The answer lies in changing consumer tastes in China.

Apple is starting to struggle in China as domestic brands including Huawei and Xiaomi gain in popularity. Huawei Technologies has passed Apple’s spot as the second-largest seller of smartphones share for two straight quarters this year, including the latest quarter.

This looks to be a long-term trend change as, especially in China’s largest cities, the mystique of foreign brands is fading. Chinese consumers are getting more sophisticated and the better local brands are becoming more popular.

In a recent annual survey of China’s favorite brands, Apple dropped out of the top 10 with a fall from fifth to eleventh. And one of its main rivals in China – the aforementioned Huawei – jumped from twelfth to fourth.

Apple’s decision though to not disclose unit volumes is disquieting and likely due to the fact that the company faces the possibility of its first annual decline in sales volume next year and wants the investing public to focus elsewhere.

That’s a warning sign that Apple is no longer the elite stock it once was.

Buffett just went all-in on THIS new asset. Will you?
Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.

Source: Investors Alley 

This Is the Best Tech Stock to Buy in November 2018

It’s been a banner year for the tech sector, and that’s especially true for the best tech stock to buy in November 2018

Just look at what some of the big tech stocks have already done. Tech giant Amazon.com Inc. (NASDAQ: AMZN) is up a staggering 44%. Apple Inc. (NASDAQ: AAPL) has risen 18%.

With tech stocks like Amazon and Apple near all-time highs, it can feel like investors have missed the boat on tech investment.

gas pump

However, that couldn’t be further from the truth. Some of the best tech stocks to buy right now are flying under the radar – and they’re easy to find if you know where to look.

We do. And we’re going to show you how this booming new tech sector is going to send our top tech stock soaring…

The Most Exciting Tech Field to Invest in Right now

One product on the verge of redefining modern life in the same fashion as the personal computer is autonomous electric vehicles.

You see, self-driving electric cars stand at the convergence of three important and innovative trends – clean energy, technological innovation, and safer transportation.

As of this writing, more than 1 billion gas-burning vehicles are used every day – and that’s just passenger cars. Trucks, motorcycles, and vehicles using combustible engines use immense amounts of oil.

Burning fossil fuels is one of the leading causes of greenhouse gases, which many believe are driving climate change.

With carbon emissions expected to rise an additional 100% by 2035 without substantial intervention, limiting the carbon output of traditional gas burning vehicles is imperative.

And that’s where self-driving electric cars come in. Because they limit the global net consumption of fossil fuel, autonomous electric cars are a crucial part of limiting carbon emissions – and will play a tremendous roll in future green investments.

Electric cars are also expected to play a vital role in improving vehicle safety and navigation.

You see, autonomous vehicles can sense and reduce driver error – saving lives and making traffic accidents a thing of the past.

Because of the clear benefits in safety and navigation, analysts believe that the self-driving car market will increase tenfold in fewer than 10 years, jumping to a value of $556 billion.

And we’ve identified one company that’s going to ride this boom into immense profits.

It’s a major tech firm that’s going to play a vital role in the mass production of electric autonomous vehicles.

And it’s going to make shareholders a killing in the process…

The Best Tech Stock to Buy in November 2018 Is a Leader in Self-Driving Vehicles

Money Morning Defense and Tech Specialist Michael A. Robinson believes the best tech stock to buy in November 2018 isn’t a vehicle maker. It’s a microchip company that supplies the brains, not the brawn.

Nvidia Corp. (NASDAQ: NVDA) is expected to be a prime beneficiary of the self-driving car market.

Nvidia is best known for its video game products. It makes the graphics cards for computers and video game consoles.

But it makes a lot more than that. The company’s latest strategy is to partner with car manufacturers and offer a wide spectrum of advanced tools centered in technology that they will use on the way to fully self-driving vehicles.

Nvidia combined its development strategy with sensor suppliers, advanced mapping software, research shops, and more. As a result, Nvidia’s Drive AX platform is the premier product in its class.

Drive AX operates as a central nervous system for self-driving vehicles.

Nvidia has a number of automotive partners. They include Volkswagen AG (OTC: VALKA), one of the larger global manufacturers. According to reports, Volkswagen intends to give a majority of its self-driving vehicle development to Nvidia.

Nvidia is also working with automakers Audi AG (OTC: AUDVF) and Volvo AB (OTC: VLVLY). Truck makers such as PACCAR Inc. (NASDAQ: PCAR) and logistics firms such as Deutsche Post AG (OTC: DPSGY) are also deploying the Nvidia Drive AGX platform.

All of this effort is having a great effect on the company’s bottom line too. Nvidia sales soared to $10 billion in 2017 from just $5 billion the year before. In 2019, the company is expected to rake in net sales of $19 billion.

Not bad for a company and industry at the very start of its potential growth trajectory.

Robinson forecasts that its growth in earnings, combined with its work in red-hot innovative fields, will propel the share price to $400 in 12 months.

That’s a soaring 96% rise from its current price of $204.

Buffett just went all-in on THIS new asset. Will you?
Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.

Source: Money Morning 

3 Beaten-Down Tech Stocks You Can Buy Now

Source: Shutterstock

The latest October collapse of tech stocks has unveiled many bargains. Some are obvious. Others are less so. For investors with cash to spend, tech stocks that have been beaten down offer good value. You can buy at these levels and feel confident that in five years your money will have built something.

But the obvious buys are not always the obvious names. That’s because, as with recessions, corrections do show the bankruptcy of some business models. Not everything will come back.

So, tread carefully.

Here are three stocks, ranked from the most obvious to the least obvious, that I think will rally from here.

amazon stock

Source: Shutterstock

Amazon (AMZN)

Since Sept. 27, Amazon (NASDAQ:AMZN) shares have fallen 18%. Founder Jeff Bezos’ personal fortune has dropped by about $27 billion. But Amazon will come back. During 2018 it solidified its position as the only choice for e-commerce infrastructure. When the Administration moved to increase postal rates, Amazon yawned, because it has already invested in delivery infrastructure to become independent of the U.S. Postal Service.

If the anti-trust police come after Amazon it will have millions of allies, because 53% of its salesare generated by third parties. While Walmart (NYSE:WMT) is taking inventory risks, Amazon is laying those off, acting more like a franchisor than a franchisee. It gets increased margins without battling over prices. It also has thousands of businesses, large and small, who will go to bat for it if the anti-trust police ever come calling.

At its Oct. 29 opening price of $1,645 per share, Amazon is selling for 3.5 times its anticipated 2018 revenue of $230 billion. That’s still high for a retailer, but low for a tech company. Only 60% of sales in its third-quarter report came from products. The rest was in services, and $6.7 billion of that was from Amazon Web Services, where 31% of revenue hit the net income line.

With revenue growing 34% per year, AWS growing at 42% per year and international revenue now 31% of the total, Amazon stock is a can’t-miss proposition.

Investors Won't Believe the Micron Stock Hype Without Evidence

Source: Shutterstock

Micron (MU)

Micron Technology (NASDAQ:MU) is cheap, but for a good reason. Its price-earnings multiple of 3 is misleading — memory chips are commodities, and those earnings could disappear in a flash. For fiscal 2018 they were huge, $14.1 billion, or $11.51 per share, on revenue of $30.4 billion. But in its conference call announcing those earnings, chief financial officer Dave Zinsner cut his earnings forecast for the current quarter.

That announcement spawned the recent wreck of tech stocks. Since Sept. 20 Micron shares are down 18.7%, opening for trade Oct. 29 at about $36.50 per share. The market cap of $40.2 billion is just one-third higher than last year’s sales of $30.4 billion.

In past technology cycles, memory prices have collapsed. Micron has been left in terrible shape. It had started making PCs before the last recession and declared bankruptcy on that unit. After the dot-com bust, between May 2001 and early 2003, Micron stock lost 80% of its value.

But it may truly be different this time. CEO Sanjay Mehrotra rode out several tech recessions as co-founder of SanDisk. Micron is buying out Intel (NASDAQ:INTCin flash memory, forcing Intel into the arms of Chinese partners the Administration may not want it to have.

Then there’s the supercycle. Memory and intelligence are being added to millions of previously inanimate objects. Consumer products are coming under voice control, city streets are being automated, cars are becoming intelligent and industrial service cycles are becoming automated. It’s a trend that’s just getting started, with the number of networked devices expected to top 50 billion in just two years.

Who needs crypto-miners, or even cloud data centers, when you have a sure thing like that?

IBM Stock Drops in Pre-Market Trading on News of $33B Red Hat Acquisition

Source: Shutterstock

International Business Machines (IBM)

At its October 29 opening price of $120.60, International Business Machines (NYSE:IBM) has a market cap of just $114 billion, on expected 2018 revenue of $79 billion. It’s super cheap, especially with a dividend of $1.57 per share, still supported by earnings, yielding 5%. But that’s not the reason to speculate on its comeback. The reason to buy is its $34 billion acquisition of Red Hat (NYSE:RHT), the leader in cloud software, and what it portends for the company’s future.

What it means is that IBM is finally serious about open source and the cloud, with which it has had an on-again, off-again relationship for decades. IBM did buy cloud provider Softlayer for $2 billion in 2012, but it was still lagging, focused on creating “solutions” rather than offering tools, as Microsoft (NASDAQ:MSFT) does.

But the cloud is a tools business, built on open source software that customers can adapt and even contribute to. Red Hat is the unquestioned leader in this business, and since it will represent 30% of IBM’s value when the deal closes in 2019, IBM will have to listen to it.

This analysis is highly speculative, but I’m not the only reporter making it. Red Hat CEO Jim Whitehurst should be the first person IBM turns to as a successor to IBM CEO Ginni Rometty, who is 61. That’s about the age previous IBM CEOs like John Akers and Sam Palmisano were at retirement.

If she does make that announcement, IBM stock is going to soar.

Buffett just went all-in on THIS new asset. Will you?
Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.

Source: Investor Place 

2 Electricity Stocks Powering the World’s Smartphones and More

It’s the dirty little secret of the digital world we live in… technology is an electricity hog.

Demand for computing power globally from internet-connected devices, emails, high-resolution video streaming, surveillance cameras, the new generation of smart TVs and other devices is increasing 20% a year, according to Swedish researcher Anders Andrae.

Dire Power Consumption Forecast

In an update to his 2016 peer-reviewed study, Andrae found that without dramatic increases in efficiency, the communications industry could use 20% of all electricity and emit up to 5.5% of the world’s carbon emissions by 2025. This would be more than any single country except for the U.S., China and India.

A similar study from U.S. researchers forecast that information and communications technology could create up to 3.5% of global emissions by 2020 – surpassing the aviation and shipping industries – and up to 14% by 2040, which is about the same proportion as the U.S. currently. And Greenpeace found that if the global IT industry were a country, only China and the United States would contribute more to climate change.

The U.S. researchers said power consumption could triple in the next five years as one billion people in the developing come online and the internet of things (IoT) expands in developed countries. Cisco Systems believes internet traffic worldwide will nearly triple over the next five years.

Most of this demand for electricity will come from power-hungry server farms that store digital data from billions of smartphones, tablets and internet-connected devices, which is growing exponentially.

In his research, Andrae said “The situation is alarming. “We have a tsunami of data approaching. Everything which can be is being digitalized. It is a perfect storm. 5G [the fifth generation of mobile technology] is coming, IP [internet protocol] traffic is much higher than estimated, and all cars and machines, robots and artificial intelligence are being digitalized, producing huge amounts of data which is stored in data centers.”

Related: Energy Stocks Adopting New Technologies

Data Centers = Electricity Hogs

When people speak of the cloud in technology, it seems like an almost mythical place where we store data, stream entertainment and send emails. But the cloud is a very real place…

Hundreds of data centers around the world are the factories of this digital age that run all of our digital services. And the number is expanding rapidly – there is about $20 billion spent annually globally on their construction.

The largest of these data centers can cover in excess of a million square feet and consume as much power as a city of a million people!

Whatever we do with data requires electricity and lots of it. The processors in the biggest data centers hum with as much energy as can be delivered by a large power station, 1,000 megawatts or more. And it can take just as much energy to keep the servers and surrounding buildings from overheating.

Every keystroke you make adds to the use of energy. Google estimates that a typical search requires as much energy as illuminating a 60-watt light bulb for 17 seconds. That doesn’t seem like a lot until you begin to think about how many searches you might make in a year and multiply that by the number of internet users (over 3 billion) around the world.

Streaming, of course, is really data-heavy and therefore a big power consumer. Cisco Systems forecasts that video will make up 82% of internet traffic by 2021, up from 73% in 2016. Already, about a third of internet traffic in North America is dedicated to streaming Netflix services alone.

The Push Toward Renewable Energy

What fascinated me is the fact that most of the data titans are moving toward powering their data centers with renewable energy.

One example of this occurred in February when cloud giant Switch (NYSE: SWCH), which runs three of the world’s top 10 data centers, announced plans for a solar-powered hub in central Nevada that will be the largest anywhere outside of China.

Of course, renewable energy – wind and solar power – is a lot more prevalent outside the U.S. That’s why both Google and Microsoft have recently built hubs in Finland and Facebook has done so in Denmark and Sweden. Google last year also signed a deal to buy all the energy from the Netherlands’ largest solar energy park, to power one of its four European data centers.

With this trend toward using renewable energy by the giants of the industry for their data centers, it makes the renewable energy providers, which are currently very out of favor on Wall Street an interesting contrarian play.

Two Utility Stocks to Play This Trend

Let’s now look at two utilities that provide renewable energy…

The first is NextEra Energy (NYSE: NEE), whose stock is up 17% over the past year and 10.5% so far in 2018.

It is one of the largest rate-regulated utilities in the U.S. and along with NextEra Energy Resources and other affiliated entities is the world’s largest generator of renewable energy from the wind and sun. It has been ranked number one in the electric and gas utilities industry in Fortune’s 2018 list of “World’s Most Admired Companies”.

The company continues to work on its strategy of making a long-term investment in clean energy assets. Consistent with this strategy, the company announced plans to add nearly 10,100-16,500 megawatts (MW) of alternate power generation assets across the U.S. over 2017-2020 time frame.

In the second quarter of 2018, Energy Resources added 1,082 MW of new renewable projects to its backlog and 535 MW of re-powering projects were also adjoined to the backlog in the second quarter. The company also entered the battery storage market that will further help in the development of renewable power generation assets. The company at present has a backlog of 120 MW of battery storage projects.

In Europe, my favorite utility stock (I own it) is Verbund AG (OTC: OEZVY), which is Austria’s leading electricity company and one of the largest producers of hydropower electricity in Europe. Its stock has done very well, rising 105% year-to-date and 123% over the past year. But if you buy the ADR, be careful – it is thinly traded here in the U.S.

Hydroelectric power plays a major role in Austria’s electricity supply. In Austria, nearly 65% of electricity generation comes via hydropower, and more than half of this comes from Verbund hydropower plants. The company’s Danube River power plants alone can cover the electricity needs of nearly all private households in Austria.

Verbund is also big into energy storage. Renewable energy sources such as water, sun and wind are being used to an ever greater extent in Europe, which creates challenges for the European energy system. Depending on the amount of sunshine and wind, their share of the total electricity production fluctuates greatly. In order to optimally use the electricity generated from renewable energy, they are supported by Verbund’s pumped storage power plants. The pumped storage systems act either as electricity storage or as electricity generators, depending on what is needed. The company continues to expand the network of pumped storage power plants to increase the buffering function on the energy system, storing electricity for later use.

Both utilities – one here in the U.S. and one in Europe – should allow you to participate profitably in the energy production of the future.

Buffett just went all-in on THIS new asset. Will you?
Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.

Energy Stocks Adopting New Technologies

Even as technology invades other areas of industry, there has been one notable laggard in adopting new technologies – the energy industry.

Even the mining industry is using robots to automate many of the functions at mines, but autonomous robots are still a rarity in the oil and gas industry (more on that later). So it is major news that Royal Dutch Shell PLC (NYSE: RDS.A and RDS.B) is investing in an artificial intelligence (AI) platform to support operations across the entire group.

Shell and AI

The company providing the AI platform for Shell is C3IOT on Microsoft Azure. The main initial application of AI at Shell will be for predictive maintenance – such as working out when a piece of equipment is likely to fail, so it can be replaced before it breaks. The company says that more than 600,000 assets from individual pieces of equipment to entire wells will be covered by the predictive maintenance program.

The long-term goal though is to expand the AI platform to support other machine learning, machine vision, and natural language processing (NLP)-based uses in all of Shell’s operations – upstream, downstream, unconventional fuels, refining, and retail operations.

Jay Crotts, Shell Group CIO said “With the C3 IoT Platform, we’re looking forward to significantly enhancing the productivity and scope of our advanced analytics capabilities to create greater economic value across Shell’s operations. C3 IoT allows us to optimize our existing investments in data and cloud infrastructure while accelerating time to value of AI-based applications, so Shell can better serve our customers with even more agility and efficiency.”

I cannot emphasize enough that this is a really big deal in the artificial intelligence space. Tom Siebel, C3 IOT’s CEO, described the deal with Shell to the Financial Times as “the largest AI deployment that we’re aware of anywhere in the world.”

And he correctly suggested that the company had jumped ahead of its oil company peers. Siebel said to the Financial Times, “Everybody else is kind of looking at it. These guys are rolling it out.” Siebel predicts that the benefits for Shell will run into the billions of dollars per year!

And with evidence accumulating that the productivity gains from the shale revolution are slowing down, deploying AI could be the way the oil and gas industry takes its next leap forward.

The slowing of productivity gains from the U.S. shale revolution was emphasized recently by the CEO of Schlumberger, Paal Kinsgaard, who said that the advantages of drilling longer laterals and pumping more sand and water to increase oil production was nearing an end. He pointed to the specific example of the Eagle Ford in Texas where unit well performance is declining.

What the IEA Says

The adoption of AI by companies like Shell is just the tip of the proverbial iceberg when it comes to the potential of technology to transform the industry. The International Energy Agency (IEA) recently gave further examples of how how new technologies can boost the oil and gas industry.

One such example is the use of miniaturized sensors and fiber optic sensors that could be used to boost output or increase the overall recovery of oil and gas from a reservoir. Other examples are the use of automated drilling rigs and robots to inspect and repair subsea infrastructure and to monitor transmission pipelines and tanks.

Drones could also be used to inspect pipelines (which are often spread over many miles) and hard-to-reach equipment such as flare stacks and remote, unmanned offshore facilities. Drones with potent “sniffers” can detect methane leaks coming from oil and gas pipelines at 1,000 times the accuracy of traditional methods, saving pipeline owners significant money that is lost from leaked product and potentially from fines.

In the longer term, the IEA says the potential exists to improve the analysis and processing speed of data, such as the large, unstructured datasets generated by seismic studies. The oil and gas industry will furthermore see more wearables, robotics, and the application of AI in their field operations.

The IEA forecast that widespread use of digital technologies could decrease production costs between 10% and 20%, including through advanced processing of seismic data, the use of sensors, and enhanced reservoir modeling. Technically recoverable oil and gas resources could be boosted by around 5% globally, with the greatest gains expected in shale gas.

European Oils Lead

As you saw earlier, Shell is leading the way when it comes to the adoption of AI among the oil majors. Another European oil major, Total SA (NYSE: TOT), is leading in another segment of technology adoption – autonomous robots.

In a first for the oil industry, an autonomous robot will be deployed to an offshore oil and gas platform in the North Sea later this year. Under this pilot project, the robot will initially be deployed at the French oil firm Total’s gas plant on Shetland before being sent to join Total’s 120 workers on the company’s Alwyn platform, 440 kilometers north-east of Aberdeen, Scotland. The machine, made by Austrian firm Taurob and supported on the software side by German university TU Darmstadt, will be used for visual inspections and detecting gas leaks.

The Total trial will start with just this one robot to see how it handles the harsh conditions in the North Sea, as well as how well it works alongside people. If successful, you could see numerous such robots on offshore platforms across the world within five years, transforming the offshore oil industry.

Like many other industries, technology will eventually transform even the staid oil and gas industry. But as we have seen with other industries, the companies that fail to adopt new technologies will wither and die. The winners will be those companies not afraid of technological change.

In the case of the major oil and gas companies right now, the winners look to be the European companies – Shell (up 14% over the past year) and Total (up 22% over the past year). Both look to be good investments, especially with nice current yields of 5.5% and 4.6% respectively.

Buffett just went all-in on THIS new asset. Will you?
Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.

Here’s How Much Amazon Stock Is Actually Worth

In October 2013, Money Morning Defense and Tech Specialist Michael A. Robinson predicted that Amazon.com Inc. (NASDAQ: AMZN) was destined to hit $1,000 per share.

According to Michael, his bold price prediction “had to do with [his] thesis that high tech is vital to our economy and your investment portfolio… the road to wealth is paved by tech.”

amazon stockFive years later, little has changed for Michael and his belief in Amazon stock.

Except for the price of Amazon’s stock. Since Michael’s prediction, AMZN stock has entered the stratosphere, climbing 452% over the last five years. At the time of writing, the company’s stock is only $4 away from breaking the $2,000 barrier.

Amazon’s astonishing rise has exceeded Michael’s expectations – and has driven him to make another astonishing price call for this tech juggernaut…

Don’t Let Media Predictions Cloud Your Judgement Again    

When Amazon crossed the $1,000 market on May 31, 2017, TV host Jim Cramer issued a dire warning for Amazon investors.

According to Cramer, the $1,000 mark was a psychological barrier for investors, one that would likely result in the end of the company’s “bubble.”

As we know now, the host of “Mad Money” could not have been more off the mark. Amazon stock has nearly doubled since the stock blew through the $1,000 mark 18 months ago.

Michael often refers to Cramer’s price call as a “cautionary broadcast” – one that investors should have taken with a big grain of salt.

Michael doesn’t like to brag, but he nailed his last Amazon price prediction thanks to his 34 years of experience in Silicon Valley and a proven track record of identifying the market’s next big tech winners.

As Michael points out, much of media has been thrown off of Amazon because of fears of a tech bubble. But they couldn’t be further from the truth. Michael has long argued that “tech has become the key driver for the U.S. economy in a way we haven’t seen before.”

That’s why he’s issued a new Amazon price prediction – one that’s even bolder than the last one…

Amazon’s Next Stop: $3,000

Michael can easily justify a $3,000 share price based solely on Amazon’s massive growth rates.

For the past three years, Amazon has grown its earnings per share by roughly 99%. Just to be conservative, he cut that figure way back to 25% to make his estimate.

At that rate, the firm’s per-share earnings would double every 2.8 years. Because stock prices tend to follow earnings growth, Michael reasons the stock has the potential to double in less than five years.

That’s why this new “bold call” on Amazon stock could turn out to be conservative.

But the company’s amazing growth rates aren’t the only vital details here.

There’s something deeper.

And it’s the reason for all the upside in the first place.

Amazon now operates as essentially two different companies – and there will soon be a third.

It’s long been the king of e-commerce, and in the past few years, it’s become the clear leader in cloud computing services.

Amazon Web Services (AWS) is a profit machine. In the most recent quarter, AWS sales climbed 48.9% to $6.1 billion.

Over the past three years, AWS sales have risen 255%. The cloud services unit now accounts for 55% of Amazon’s operating income, which came in at $1.64 billion, beating forecasts.

Not bad for a “company” that only began in 2006.

However, the company’s next move is likely to give it a dominant hand in every retail area it sets foot in.

After purchasing Whole Foods Market last year, Amazon has launched a full-fledged invasion of the “brick and mortar” retail space, promising to revolutionize storefronts in the same way it changed Internet commerce.

Taken together, these three areas make Amazon a triple threat – one that promises to generate immense profits for shareholders long into the future.

However, this isn’t Michael’s only bold call…

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Source: Money Morning 

 

Are Charismatic Founders a Curse or a Blessing For Investors?

Throughout U.S. corporate history, there have been some very memorable company founders such as JP Morgan and Henry Ford. Fast forward a few decades and we have Bill Gates and Steve Jobs.

I suspect though that history will less kindly remember the current batch of founders including the likes of Travis Kalarick of Uber, John Schnatter of Papa John’s and Elon Musk of Tesla. These entrepreneurs succeeded initially, but failed to come up with a succession plan to transition to a professional management. And worse, they’ve stayed on too long, becoming both an embarrassment and a hindrance to their respective companies.

In the case of Musk and Tesla, he may have let his strong dislike of people pointing out the flaws in his company’s finances go so far that he may have committed a crime with his “funding secured” tweet. The U.S. government has launched a criminal investigation into Tesla.

All of the above examples are companies that failed at the very important task of planning for the replacement of an executive who serves not only as the company’s manager but also as its pitchman and inspiration. These companies should all have planned for a staged withdrawal with the elevation of several key executives to key positions. But Tesla for example, cannot seem to keep an executive for more than a few months.

However, there are companies that have done things right. Here are two examples, with one company’s success very plain to see and another that I believe will continue its success after its founder leaves.

Microsoft’s Teddy Roosevelt

Former President Teddy Roosevelt is perhaps best known for his approach to foreign policy that was summed up in one phrase, “Speak softly and carry a big stick.”

That seems to be the approach of Microsoft (Nasdaq: MSFT)CEO Satya Nadella. His default posture, even with rivals, is to discuss mutual advantage first, competition second. This is in stark contrast to his predecessor – the boisterous Steve Ballmer and Microsoft founder Bill Gates, who both took business as an us-versus-them competitive fight to the death.

That attitude had Microsoft’s stock and business going nowhere for more than a decade. In contrast, Nadella’s ‘soft’ approach has worked marvelously. The company’s strong revenue growth have pushed its shares to an all-time high. Microsoft’s revenue expansion is being powered by cloud computing services for businesses, where revenues have climbed from a single-digit percentage to a third of sales in just five years. Its emphasis on cloud computing is evidence that Mr Nadella was tough enough and carried a big enough ‘stick’ to win the internal company battle with the guardians of Microsoft’s legacy personal computing businesses.

It is giving Amazon a real run for its money in the sector. That because unlike the other big cloud players, Microsoft’s business extends from all the way from giant corporations to individual consumers using its Office software online. It has become a leader in edge computing — this is where more data-crunching is carried out on the network “edge” — the name given to the many computing devices that intersect with the real world, from internet-connected cameras and smartwatches to autonomous cars.

Related: Better Buy: Microsoft Versus Amazon Versus Google

And Nadella has turned Microsoft into a highly diverse company, offering products that range from applications to services to consumer hardware like the Xbox. It is also one of a handful of tech companies leading in the next age of computing – quantum computers. These machines tap into the weirdness of quantum mechanics — a branch of physics that deals with the behavior of sub-atomic particles. And it holds the promise of exponential gains in computing power, making supercomputers and even blockchain technology obsolete.

These moves make Microsoft the likely next entrant to the very exclusive “four comma club” – that is, having a stock with a valuation of $1 trillion or more.

Jack Ma and Alibaba

Another company that is doing things right is Alibaba (NYSE: BABA) and its founder Jack Ma, who recently revealed plans to step away from the company.

This transition has been in the works for almost a decade. Ma actually handed over the reins as chief executive in 2013, first to Jonathan Lu. Daniel Zhang, who replaced Mr Lu two years later, shoulders the bulk of the day-to-day running of the company along with a number of individual business heads.

That is in sharp contrast to how traditional Chinese firms are run, where control is passed on to members of the immediate family, not employees. And in a way, it reminds me of the transition at Apple from Steve Jobs to a professional manager like Tim Cook.

And while Ma remains the face of the company and contributes to the big picture plans for Alibaba, professional managers are running the day-to-day operations. For instance, Ma has never hosted an earnings call, which instead are handled by M.r Zhang, executive vice-chairman Joe Tsai and chief financial officer Maggie Wu. Contrast that to Musk’s disastrous handing of the earnings call several months ago.

So while many of Alibaba’s initiatives carry his fingerprints, they are increasingly led by the next generation. Zhang makes sure Singles Day – the largest shopping day in the world – runs smoothly. Last year, sales hit a record of $25.3 billion, dwarfing Amazon’s Prime Day.

Zhang is also the driving force behind Alibaba’s ‘new retail’ strategy — the blending of online and offline shopping — through operations such as the Hema supermarket chain where consumers can shop, order deliveries or eat in the store. Zhang is likewise championing Alibaba’s grand plan for global trade without frontiers.

Like Taobao, where more than 630 million consumers shop every month, these were all Jack Ma ideas that are being implemented by highly qualified people, such as Zhang and Jian Wang who is running Alibaba’s cloud business, which is growing by leaps and bounds. Alibaba is also moving other areas, ala Microsoft, including quantum computing and artificial intelligence (AI) chips.

Alibaba is doing things right and trade war fears are merely giving long-term investors a chance to buy the stock at a reasonable valuation level.

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It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
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This Is One of the Best Tech Stocks to Buy in October 2018

One of the best tech stocks to buy in October 2018 isn’t a flashy FANG stock or legacy Silicon Valley giant, but it could make you a killing.

Consider any innovative technology such as cloud computing, smart homes, self-driving vehicles, immunotherapy, and the Internet of Things (IoT), and it’s a certainty that the company we’re highlighting played a role.

tech stocks to buy in October 2018

The clients for this company run the spectrum from start-ups to some of the biggest companies on the planet, including Nike Inc. (NYSE: NKE) and Alphabet Inc. (NASDAQ: GOOGL).

While flying under the radar, this company has grown into the third-largest electronics manufacturing company in the world.

This is a mighty feat for a tech firm that most investors have never heard of.

And the innovations it fuels is why it’s one of the best tech stocks to own…

How Innovation Is Driving Tech’s Growth

While this is a backdoor play in the tech sector, it isn’t a small one by any measure.

The technology sector is primed for growth thanks to continued innovation. Just consider some of the recent breakthroughs…

  • Research firm MarketsandMarkets reports that the IoT market is projected to grow at a rate of 26.9% annually, from revenue of $170.57 billion in 2017 to $561.04 billion by 2022.
  • Allied Market Research says the market for self-driving vehicles is going to reach $54.23 billion by next year and then grow at an annual rate of 40% over the next seven years.
  • According to Statista, the smart home industry in the United States alone will close to double from $27.5 billion last year to $53.5 billion in 2022.

And one of the best tech stocks to buy now has become the top supplier for each one of these innovative trends. This company is a one-stop shop capable of taking any technology-based concept all the way through to production.

Critical: A breakthrough technology could disrupt every major industry, and one tiny company is at the center of it all. Its stock is trading for less than $10 now, but it could deliver a 471.9% gain for early investorsLearn more…

The company can create prototypes, protect a company’s intellectual property, establish a supply chain, and handle global distribution. Tech giants and entrepreneurs alike rest easy knowing that this firm has their back when they are developing or launching a new product or line.

This is just one of the reasons why this company was named among the world’s most admired by Forbes.

But the best reason to buy stock in this company is its sterling growth potential.

In fact, that’s exactly why it’s on our radar.

This company has a perfect Money Morning Stock VQScore™, meaning it’s a major growth target trading at the best buy-in price you’ll see.

That’s exactly why analysts are projecting this stock could soar 50% over the next year…

The Best Tech Stock to Buy in October

Flex Ltd. (NASDAQ: FLEX) is a Singapore-based company that designs, engineers, manufactures, and distributes a variety of consumer products.

It was originally a Silicon Valley company founded in 1969 as Flectronics Inc., but it moved overseas and shortened its name in 2016. It has 200,000 employees that work across 100 locations in 40 countries.

Over the years, Flex’s list of projects has covered the spectrum of high-tech innovation, and it’s an impressive resume.

Google enlisted the help of Flex several years back, when it wanted to break into the market for video streaming. Flex already had experience with smart home technology and devices and was able to hand Google a prototype for Chromecast in just one month.

The product launched within 24 hours in 2013, and Google had to cancel its sales promotion because it couldn’t keep up with the overwhelming sales volume.

Several years prior, Flex worked with NASA to deliver the mobility functions for its Curiosity rover, which was dispatched to Mars in 2011. The company outfitted the rover with technology that included sensors for delivering feedback and movable joints. With this tech, operators on Earth can monitor the changing conditions on Mars to make adjustments to the rover’s performance.

NASA moved to extend the mission of Curiosity indefinitely in 2012. To date, it has been collecting valuable data on Mars for over 2,200 earth days.

Nike turned to Flex when the company decided that it had to speed up its turnaround time for custom-made sneakers. The company put together a team that was able to swiftly identify and solve Nike’s largest inefficiency.

Before this partnership, Nike’s practice of laser cutting was deemed inefficient because the oxygen mixing with the laser beam burnt edges on the fabric.

Flex’s team of chemists and engineers were able to redesign a laser-cutting system that eliminated those burnt edges, which allowed Nike to significantly reduce the wait time for a custom sneaker from weeks to just a few days.

Flex is able to tackle just about any electronic issue brought to it by a client, but it is also known for helping innovators. Through its Lab IX incubator program, the company assists new tech companies in bringing disruptive ideas and products to market.

One example is Grabit, which is an automation arm that is used in warehouses and factories. Instead of gripping or simple suction, the arm uses electro-adhesion to handle fragile items like flat-screen TVs and solar panels.

The Lab IX program gave Grabit’s designers the tools they need to perfect their products and processes and bring it to market.

These are impressive feats for a tech company, but it is still a tech stock that is flying under the radar, making it an even better profit play.

FactSet reports that eight analysts out of 11 rate FLEX a “Buy” and give it a price target nearly double its current price.

And this is still selling the stock short.

In the past year, FLEX’s price/earnings ratio is only 63% of the industry average, which means it’s trading at a significant discount before Wall Street catches on.

Wall Street gives FLEX a high price target of $20 a share, a 54% increase from today’s share price of $13.03.

Buffett just went all-in on THIS new asset. Will you?
Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.

Source: Money Morning 

The Clear Winning Investment from Apple’s New iPhone Strategy

Last week, Apple (Nasdaq: AAPL) unveiled a trio of new phones that followed in line with its corporate strategy. That is, get buyers to pay higher prices for the phones while hopefully gobbling up more services (such as entertainment) as growth in the global smartphone market slows to a crawl.

The iPhone Xs (starting at $999) updates last year’s flagship model with updated cameras and a faster A12 processor. The iPhone Xs Max is the higher-end version and has a 6.5 inch OLED screen, with pricing that starts at $1,099. And for the first time, there are 512 gigabit storage options.

The third phone is Apple’s biggest bet in the sector – the iPhone Xr. Like the iPhone X, it has facial recognition and an edge-to-edge display, but is priced starting at only $749 because Apple used older LCD screen technology and aluminum instead of stainless steel. This phone is expected to be the real driver of volume for Apple with annual sales expected to be in the 100 million units range.

Apple, of course, hopes this year’s line-up will be as successful as last year’s. Apple’s iPhone revenues increased 15% year on year in the nine months to June, despite unit sales of iPhones being flat over the same time period.

The Watch That Is a Health Monitor

Apple also unveiled an Apple Watch with a larger screen and a faster dual-core processor called the S4. It also has a lot more health capabilities, making it the most significant upgrade to the Watch since it first went on sale in 2015, turning it into much more of a health monitoring device. This move into health is a major emphasis for Apple, as I’ve discussed in previous articles.

This new version – the Apple Watch Series 4 – has new health sensor and apps such as an ECG (electrocardiogram) monitor. Apple got clearance for the app from the Food and Drug Administration.

Related: 3 Tech Stocks to Buy as Apple Moves Into Healthcare

The Watch’s powerful sensors can detect when someone has a fall and will deliver an alert and call emergency services if the user does not move for a minute after the fall. The ECG capability will be available later this year and is supposed to have the capability to sense atrial fibrillation. FDA Commissioner Scott Gottlieb said, “The FDA worked closely with the company as they developed and tested these software products, which may help millions of users identify health concerns more quickly.”

As someone with a unique heart condition, I wonder though how many false readings the watch will produce, causing unnecessary trips to the doctor.

Even though the Watch is not a runaway hot seller like the iPhone, it is the world’s best-selling smartwatch and is helping Apple expand into health, which is a plus. The new Watch line start at $399.

The Investment Message

One takeaway I had from the recent Apple event is that Apple is facing growing challenges in the smartphone market. This is particularly true if you look outside the U.S. market. More on that in an article in the not too distant future.

But I also had other takeaways… and found a winner and a loser from the Apple event.

The Winner – Taiwan Semiconductor

The winner has to be Taiwan Semiconductor (NYSE: TSM), also known as TSMC, which is the world’s largest contract semiconductor manufacturer with a 56% market share. And it dominates Apple’s chip production ever since Apple became Taiwan Semiconductor’s biggest client in 2015.

TSMC is also at the forefront of the next phase in the evolution of the smartphone.

Apple’s latest phones are the first devices anywhere to include a chip (A12 Bionic) made with 7 nanometer process technology. That means the width of the features etched on to the silicon has reached a new level of miniaturization, down from the previous 10 nanometers. The chips are designed by Apple but manufactured by TSMC. Getting to the 7 nanometer level has been much tougher for the industry than previous moves down in size, and a sign of how Moore’s Law — which predicted regular advances in the number of transistors that can be squeezed on to a chip — is running out of steam.

But there is much more involved here than just size. Apple’s chip includes a specialized accelerator for machine learning known as a neural processing unit. With the promise of applications that can learn from masses of data, this is where much of the effort in new hardware design is now focused.

Last month, GlobalFoundries – the world’s number two semiconductor contract manufacturer – put off its own plans for 7 nanometer chips indefinitely. And Intel, whose long leadership of the chip industry is now in question, continues to struggle. After several delays, products containing comparable chips will not be available until late next year at the earliest.

This leaves TSMC in the catbird seat with production of the most advanced processors now left to just two companies – TSMC and Samsung. TSMC will be the likely the primary beneficiary as advanced technology investment grows too expensive for all but the leading industry players, as advanced technology becomes more of a ‘winner takes all’ business. By the way, GlobalFoundries’ withdrawal followed a similar move last year by United Microelectronics, the third-biggest player.

The Loser – Fitbit

With Apple moving into the healthcare sector in such a big way with its new Watch, a likely loser is Fitbit (NYSE: FIT). On the day Apple unveiled its Watch plans, Fitibit stock fell more than 5%, bringing its loss over the past year to 16.5%.

Outside, the U.S., it is facing similar competition from China’s Xiaomi, where after years of maintaining its leading position in the wearables market, Fitbit is now losing ground to the Chinese company.

It seems inevitable that Fitbit’s growth will continue to slow as smartwatches outshine the fitness wearable category. Despite the broad range of devices Fitbit provides at different price points, it faces tough competition at both the high- and low-end products. At the high end, there is Apple’s multi-functional Apple Watch, which renders Fitbit devices useless. And at the lower end, the company’s biggest competitors are Xiaomi and also Garmin.

Fitbit would also be affected adversely by tariffs on China since it uses China-based contract manufacturers. This will only add to the pressure on it from well-funded competitors, Apple and Xiaomi. Despite the optimism from some Wall Street firms, it is likely headed toward becoming a footnote in the history of wearable health devices, which is still in its infancy.

Buffett just went all-in on THIS new asset. Will you?
Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.

Source: Investors Alley 

3 Breakout Stocks to Spice Up Your Portfolio

Source: Shutterstock

The pace of technology is breathtaking. Just some of the trends include cloud computing, AI (Artificial Intelligence), machine learning and the IoT (Internet of Things). So for investors, there are many opportunities.

But then again, breakout stocks are usually volatile — and expensive. It can be tough to make a purchase decision when the returns have already been over triple digits for the past year! And because the expectations are at lofty levels, it does not take much to deflate the stock when there is some bad news.

This is why investors need to be cautious with breakout stocks. Basically, they really should only be a small portion of your portfolio.

So then, what are some companies to consider that could spice up your portfolio? Here’s a look at three:

Breakout Stocks to Buy: Okta (OKTA)

Breakout Stocks To Buy: Okta (OKTA)

Source: Shutterstock

Okta (NASDAQ:OKTA) is a next-generation cloud operator that develops identity services for enterprises. For the most part, the focus is on helping to secure access to critical information. The platform has more than 5,500 pre-built integrations and over 5,100 customers.

Okta has also been seeing a strong acceleration in its growth. Just look at the latest quarter, as the company pummeled Wall Street expectations. Revenues soared by 57% to $94.6 million, compared to the consensus forecasts of $84.8 million. The company also raised its full-year guidance to $372 million to $375, up from the prior forecast of $353 million to $357 million.

A key is that the company has been getting much more traction with large customers. During the past year, there was a 55% increase in the number of customers that generate subscriptions of $100,000 or more. This is all part of the so-called “land and expand” strategy.

But it does look like the opportunity for Okta is still in the early phases. According to CEO Todd McKinnon, during the latest earnings call: “It starts with the significant market tailwind in our favor. Every organization is moving to the cloud. Every company has to become a technology company and everyone is worried about security. We are seeing identity become mainstream as organizations recognize the critical role that identity plays in their environment.”

Breakout Stocks to Buy: Advanced Micro Devices (AMD)

Breakout Stocks To Buy: Advanced Micro Devices (AMD)

Source: Shutterstock

Despite a rough ride today, the turnaround of Advanced Micro Devices (NASDADQ:AMD) is starting to show big-time results. CEO Lisa Su has done an amazing job of focusing on the major opportunities while also being disciplined with the bottom line.

Even though AMD has been around since the late 1960’s, the company now looks more like a scrappy startup. In the most recent quarter, revenues jumped by 53% to $1.76 billion.

As for the main driver, it is the enormous datacenter market. Keep in mind that AMD’s EPYC server processor has gotten adoption from companies like Cisco (NASDAQ:CSCO) and HP Enterprise (NYSE:HPE). It also helps that rival Intel (NASDAQ:INTC) has stumbled, as it has been slow to introduce new chipsets. The company currently has about 99% of the market for datacenters.

In other words, it is a very juicy target for AMD.

Wall Street is definitely getting excited, with multiple upgrades. For example, FBN Securities analyst Shebly Seyrafi notes that the server-chip market is about $16 billion and that the EPYC chip is poised for strong gains.

Breakout Stocks to Buy: Cloudera (CLDR)

Breakout Stocks to Buy: Cloudera (CLDR)

Source: Shutterstock

Back in early April, big data company Cloudera (NYSE:CLDR) stock got crushed, plunging by more than 40%. The company whiffed on its earnings as the growth engine stalled.

Yet management at CLDR took swift action, especially with the restructuring the sales team. And it looks like things are getting back on track. In the second quarter, revenues rose by 23% to $110.3 million, while the Street was looking for $107.7 million. The 8-cent loss was also much better than the consensus forecast of 15 cents. What’s more, CLDR increased its full-year guidance to $440 million to $450 million, up from $435 million to $445 million.

The company certainly faces tough competition from companies like Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). But the market size is large enough for multiple players. Besides, CLDR’s strategy of disrupting the traditional data warehousing market appears to be spot-on, as functions like machine learning, AI (Artificial Intelligence) and analytics move towards cloud platforms.

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