Technology Stocks Forecast For 2024

US technology stocks measured by the Nasdaq Composite Index could rise more than 14 % in 2024, driven by the ongoing artificial intelligence, AI boom, according to Wolfteam ltd. 

Artificial intelligence, AI is changing our world, by making us work more efficiently, saving our time and making humanity ultimately more productive. The losses and gains from artificial intelligence, AI should be balanced out with governments and society's help.

Technology value stocks like, Apple, Microsoft, Oracle and Alphabet will outperform the other top 10 technology stocks like Meta, Tesla, NVIDIA, Amazon, Intel and Adobe.

If no credit, banking default event ensues, small capitalization technology stocks will outperform the general market.

Stocks Forecast for 2024

The main US stock market indices the S&P 500, DJIA and Nasdaq Composite are going to rise by more than 10 % in 2024, barring a credit, large bank default event cause by the already high level of interest rates.

The likely US stock market rally in 2024 will be driven mainly by technology and oil, gold and other commodities related stocks.

The current artificial intelligence, AI boom will continue feeding the higher price of technology stocks, while geopolitical tensions will raise prices of base metal miners, oil producers and precious metals miners' stock, according to Wolfteam LTD.

Bitcoin Price Forecast For 2024

 

Bitcoin's price will average 57 000 USD with the possibility of briefly topping 70 000 USD in 2024, according to Wolfteam Ltd.'s house view.

The main factors that are going to by bring such a development are the:

1) The Federal Reserve targeting lower interest rates

2) Military encounters in the world, which drive people towards the anonymity and freedom of government intervention of cryptocurrencies

3) General increase of risk taking of market participants

Stocks that could benefit from the rising prices of Bitcoin, cryptocurrencies are Coinbase, Nu Holdings Ltd. Robinhood markets, Microstrategy, Block etc.

Bitcoin Stocks Outlook For 2024

 

Bitcoin, cryptocurrencies relates stocks like Coinbase, Robinhood markets, Nu Holdings Ltd, Microstrategy could triple in value in 2024 driven by the likely rising Bitcoin price in 2024, according to Wolfteam Ltd.'s house view.

The main factors for the rising Bitcoin price, according to Wolfteam Ltd.'s estimates in 2024 are:

1) The Federal Reserve implication in the December 2023 meeting that the central bank of the United States of America will strive to lower interest rates levels in the US. Lower interest rates levels will make more funds flow into lending to and venture capital investing in Bitcoin cryptocurrencies related businesses.

2) The introduction of a BitcoinETF will provide for a new instrument to invest in cryptocurrencies and thus increase the money flowing into Bitcoin by increasing the participation in cryptocurrencies investing of institutional investors like asset managers, hedge funds and even endowments and pension funds.

3) General improving risk sentiment will provide for more news coverage of Bitcoin, cryptocurrencies, which will increase investments into Bitcoin, cryptocurrencies and thus raise Bitcoin, other cryptocurrencies' prices in 2024.

Bitcoin's price could rise above 102 000 USD in 2024, according to Wolfteam Ltd.'s projections and estimates.

Coinbase Valuation In The Current Environment. Federal Reserve Targeting Lower Rates

Coinbase Inc, the Bitcoin, cryptocurrencies exchange could triple its market capitalization in the space of 1 year in the current macroeconomic and financial environment.

The Federal Reserve, the central bank of the United States has pivoted in its latest meeting in December 2023, implying that it will soon lower the target for the Federal Funds Rate, which the Federal Reserve can influence via its monetary policy tools and thus lower the general interest rates level in the US and by extension partly in the global economy.

Lower interest rates help small businesses, Bitcoin, crypto related including, with cheaper loans. In addition, lower interest rates increase the risk-reward appeal of venture capital funds, because when interest rates are low, institutional investors like pension funds and endowments find it relatively less attractive to hold predominantly US treasuries and more attractive to invest small part of their multi- trillion USD of assets in venture capital funds and small and medium technology startups enterprises, many of which are Bitcoin, cryptocurrencies, blockchain development related businesses. Venture capital funds might invest part of funds flowing into them in Bitcoin, cryptocurrencies, blockchain related technology startups, which will boost the money turning within the crypto sector, increase the media coverage of Bitcoin, cryptocurrencies startups and by extension of Bitcoin, cryptocurrencies bringing an air of novelty, newness into Bitcoin, crypto. Again. This increased media coverage and new found novelty of Bitcoin, cryptocurrencies will increase the general public's acceptance of cryptocurrencies and thus increase even more the cash inflows in the Bitcoin, cryptocurrencies sector, which will raise prices of Bitcoin, cryptocurrencies and the associated cryptocurrencies associated publicly listed stocks like Coinbase, Nu Holdings Limited, Robinhood markets, Microstrategy, etc.

In short, in the current environment of pending monetary loosening Coinbase is still grossly undervalued, despite Coinbase's stock price more than tripling in 2023. Coinbase's market capitalization could again triple in 2024.

US Stock Market Open. 28th December

 

The US stock market will close positively, up today, measured by the main US stock market indices, according to Wolfteam Ltd.'s estimates.

The Christmas stock rally is alive and well. This documented seasonality of the US stock market is fed by the recently signaled pivot to lowering the target Federal Funds Rate and thus overall interest rate levels by the Federal Reserve.

Las year, US stock indices lead by the Nasdaq Composite fell a lot, so in 2023 the correction upward was more likely, which influenced positive stock market trading days' closes on most of the 2023 trading days.

Today's trade will most probably be thin, because of the intermittent working between the holidays days.

Even a small positive bias should drive the S&P 500, DJIA and the Nasdaq Composite higher today, the 28th of December 2023.

Instacart Valuation

Instacart, the American delivery company based in San Francisco is undervalued, according to Wolfteam Ltd.'s projections and estimates.

Instacart,  with 2.55 billion USD revenue, growing at 39.09 % and net profit margin of 16.78 % for 2022 has an intrinsic value of 14.2 billion USD. Instacart can command much higher Price/Sales multiple than Amazon, because it is consistently profitable with average net profit margin of 2 % for the last 4 years, excluding a year with an extraordinary high negative net profit margin. For the last three reported calendar years Instacart's net profit margin is 3 % on average. Instacart's current market capitalization is 6.71 billion USD.

Mark Andreesen once said that 'software is eating the world'. Nowhere this is more true than in the online delivery business where Instacart is active in. The online delivery business is basically a monopoly market dominated by Amazon. Amazon's market capitalization is 1.585 trillion US dollars currently. In Amazon's valuation its very profitable cloud computing business plays a large role, of course. But the global online delivery market is to reach 1 trillion USD in yearly revenue in the next 7 years. The online delivery has constantly grown in the last 15 years.

And Instacart is a viable challenger in online delivery with a sound business model, profitable business model at that. When Instacart did its IPO months ago at the opening of Instacart's stock trading, Instacart was glaringly undervalued. Since then, Instacart lost 20 % of its IPO market capitalization. So Instacart is more undervalued now.

In short, Instacart is undervalued on its profitable business model, the growth of online trade, the large business opportunity in global online delivery due to Amazon's monopoly and the current undervaluation, according to Wolfteam Ltd. of Instacart, based on Price/Sales ratio and other comparable valuation metrics.

Bitcoin Investing Risk On The Federal Reserve Change Of Direction

Bitcoin's price could top 71 000 USD in 2024 on the Federal Reserve recently implied pivot towards lowering the target for the Federal Funds Rate and thus lowering interest rate levels all over the world.

Lower interest rate benefit venture capital funds, which style of investing gets more attractive with lower yields on US treasuries influenced by the recently implied future policy of the Federal Reserve.

Thus, money will flow into Bitcoin, cryptocurrencies related projects and empower more Bitcoin mining, news creation about Bitcoin, cryptocurrencies, which will gradually increase public acceptance of Bitcoin and as follows Bitcoin's price will increase.

But the future, possible upwards price movement in 2024 of Bitcoin's price is fraught with risks, because the path of the Federal Reserve policy is uncertain. This Federal Reserve uncertainty creates volatility, which could bring volatility in Bitcoin's price movements in 2024, according to Wolfteam Ltd.

And volatility is one way one measures risk. So the most probable upwards movement of Bitcoin's price in 2024 can be marred by large, downside movements, downside volatility or large price, investment risks.

Tesla And AI

Tesla, the electric vehicle manufacturer's intrinsic worth is 120 billion USD, which is the value of the electrical engineers, software engineers, machine learning engineers, artificial intelligence, AI engineers along with the economists that work for Tesla and Tesla's electric car manufacturing technology, according to Wolfteam Ltd.'s estimates.

That estimate is predicated on the current state of affairs that Tesla self driving car automation software does not materialize efficiently. If Tesla manages to use all the gathered car traffic data to produce an efficient artificial intelligence, AI based technology to provide car self driving automation, Tesla's intrinsic worth could reach 760 billion USD. Tesla most probably has the most encompassing traffic data set, available to humanity with which to train its recurrent neural networks, convolutional neural networks artificial intelligence, AI modelling technology.

If Tesla is able to develop self driving technology via artificial intelligence, AI, Tesla will most probably be able to gather data about the behavior of car passengers. This will represent terabytes of terabytes of treasure trove of information, which Tesla could gather, model via artificial intelligence, AI and use to feed other business initiatives. If all these presumptions come to fruition, Tesla might be worth 1.72 trillion USD.

Artificial intelligence, AI is a tool that feeds on data. Data is the new oil. The company that possesses the largest data set on a particular activity will be able to train the recurrent neural networks, convolutional neural networks, artificial intelligence, AI technology on this data set, sell the particular product that this information is relevant for to consumers and possibly make hundreds of billion of USD in revenue, which will substantiate trillion USD valuations.

Aside from its artificial intelligence, AI self driving endeavors, Tesla is striving to become a viable electric vehicle batteries producer. This business line could on its own end up being worth hundreds of billions of USD.

But the real promise for Tesla lies in its efforts to develop artificial intelligence, AI self driving technology. Yes, Tesla has the training set, but each situation on the road is unique. There are literally quadrillions of possible traffic combinations between cars, trucks, trailers, motorcycles, bicycles and pedestrians. Many analysts believe that the current state of artificial intelligence, AI and computing power is not developed enough to produce viable vehicle self driving technology. Actually, in Wolfteam Ltd.'s view, the traffic data set Tesla possesses is also not nearly large enough. The situations on the road are just thousands of quadrillions. It is is not enough for Tesla to develop artificial intelligence, AI models that are nearly good enough. The danger for the drivers is enormous even in a 97 % good enough model. Autopilot works for airplanes, but the traffic for airplanes is much less dense, millions of times less dense than earthly car traffic. There is always the unpredictability of other drivers' behavior and at times erratic behavior of pedestrians, many of whom are children, who could make nonlinear, unpredictable moves on the road.

Artificial intelligence, AI is a powerful tool, but apparently its state has not reached the perfection required for vehicle auto pilot. So Tesla is counting basically on an artificial intelligence, AI technology breakthrough to develop self driving vehicle technology, which will substantiate its recent trillion USD valuation.

According to Wolfteam Ltd.'s corporate view, the state of artificial intelligence, AI as a whole and Tesla's modelling subset of artificial intelligence, AI is many years away from developing a viable self driving technology.

NVIDIA And AI

 

NVIDIA, the dominant supplier of computing Graphics Processing Units, servers infrastructure for artificial intelligence, AI is leading the way of artificial intelligence, AI hardware.

Basically, by providing the chips hardware for artificial intelligence, AI NVIDIA has become a leader in artificial intelligence, AI itself.

Artificial intelligence, AI is the next technology frontier. It is true artificial intelligence, AI has developed in spurts of ups and downs in the last 50 years. But now the current computing power is rife to accommodate artificial intelligence, AI. And this computing power is provided mainly by NVIDIA, the leader in artificial intelligence, AI hardware. 

 

In a negative scenario where the artificial intelligence, AI development stutters again NVIDIA's worth will be 400 billion USD. In a mildly positive scenario where artificial intelligence, AI develops relatively well NVIDIA will be worth 1.6 trillion USD.

In the very best, very positive scenario where artificial intelligence, AI lives up to all expectations and surpasses them NVIDIA could become a 3.2 trillion USD market capitalization company, according to Wolfteam Ltd.'s revenue projections and estimates.

Many competitors like Apple, Meta and lately OpenAI are trying to design their own computer processing chips tailored to artificial intelligence, AI. NVIDIA, however has a dominant market share position on the artificial intelligence, AI computer processing chips market and NVIDIA is very difficult to dislodge, which numerous competitors' failed attempts have proven. NVIDIA's market capitalization at the moment is 1.21 trillion USD, which speaks volumes of NVIDIA's dominant position in artificial intelligence, AI computer processing chips.

 It could be safely said that NVIDIA is the poster stock of the current technology boom, namely artificial intelligence, AI, which many Wall Street analysts, technology leaders, professors and other scientists tout as the next, fourth industrial revolution. Whether artificial intelligence, AI lives up to the hype remains to be seen. However, exactly this uncertainty increases the optionality of NVIDIA's stock, because of the volatility of expectations, uncertainty of the underlying artificial intelligence, AI technology development.

And exactly this future volatility makes NVIDIA so valuable.

Meta, Facebook Owner And AI

 

Meta Inc, the owner of Facebook is the latest of the 'magnificent seven' Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla to enter the artificial intelligence, AI 'wars' or stiff competition to put it mildly.

Artificial intelligence, AI is perceived by many Wall Street analysts, technologists and mathematicians as the next technology and thus investment frontier. Artificial intelligence, AI is quoted by many as the proverbial fourth industrial revolution.

Meta, Facebook's owner has come out with its own open source LLAMA Large Language Model, which is to rival OpenAI's ChatGPT.

Meta's focus on open source is a strategic advantage in the artificial intelligence, AI competition, according to Wolfteam Ltd.'s corporate view.

Python, Mozilla Firefox browser, Android, TensorFlow, R, JAVA are just some of the hugely successful open source projects the world is enjoying. Angular by Alphabet, Google's owner and ReactJS are two front end JavaScript development libraries, which are contributing immensely to the software development community and the society at large.

By open sourcing its LLAMA artificial intelligence, AI model, Meta, Facebook's owner is gaining a strategic advantage in the artificial intelligence, AI.

Meta, via mainly Facebook, but also with Instagram, WhatsApp, Messenger and its other properties possesses huge treasure trove of information about its users, possibly second only to Alphabet's Google information stack, which gives it a huge advantage in the artificial intelligence, AI.

Based on the information it possesses and open sourcing its artificial intelligence, AI models, Meta, Facebook's owner could end up with intrinsic value of 2.7 trillion USD in the next 12 years.

Microsoft And AI

Microsoft is already offering artificial intelligence, AI services via its cloud offering Azure.

Cloud computing, arguably after AI is the most important technology of our time and is made possible via artificial intelligence, AI algorithms like tree, random forest, back-propagation, k-means clustering, logistic regression, linear regression, etc

Microsoft did not have a popular artificial intelligence, AI chat bot before. Now, Microsoft with its OpenAI's share of 49 % has the leading artificial intelligence, AI chat bot technology on the market with ChatGPT, which uses large language models, essentially linear regressions with more than 2 billion parameters or unknowns or mini mathematical models or 2 billion + mini algorithms, integrated into a large artificial intelligence, AI algorithm.

OpenAI went through great deal of turbulence lately with the one week ouster than shock return of its CEO Sam Altman. That damaged the Open AI's ChatGPT brand a lot. ChatGPT lost some of its users momentum. But the underlying technology is still there, so OpenAI's ChatGPT should regain its momentum. Also provided it keeps key personnel like Ilya Sutskever, OpenAI's CTO until three weeks ago, before the returning Sam Altman ousted Ilya Sutskever from his position in OpenAI. Ilya Sutskever is still associated with OpenAI, though. Ilya Sutskever was a key hire from OpenAI ChatGPT's main competitor, Alphabet, Google owner and producer of the Bard artificial intelligence, AI chat bot.

Microsoft, actually via Azure and more importantly via the cloud version of Microsoft Office has gathered huge terabytes of information on its more than 1 billion users in the case of Microsoft Office. Actually, it is not known to what extent Microsoft is allowed to use this data on its users. Actually, despite the fact that Microsoft owns 49 % of OpenAI it is not known to what extent OpenAI can tap Microsoft's huge treasure trove of user data in developing ChatGPT's version. Microsoft gathers also huge amounts of data via its search engine Bing, which is now more than a 10 billion USD in yearly revenue business.

If OpenAI is allowed to tap into all of Microsoft's Azure, Microsoft Office and Bing data, that would make OpenAI's ChatGPT artificial intelligence, AI chat bot a viable to an extent competitor to Alphabet's Google search engine. To an extent, because OpenAI's ChatGPT interface, although containing useful, large amounts of tailored information is still clunky compared with Google's clean interface in Wolfteam Ltd.'s view.

In short, Microsoft has a lot of catching up to Alphabet's Google to do in artificial intelligence, AI. Alphabet's Google search engine also uses a neural network, which is supported by a linear regression with hundreds of millions of parameters to produce search results supported by links. Alphabet has announced that since 2012 it uses a neural network to rank Google search results.

If Microsoft allows its de facto subsidiary OpenAI to use Microsoft's Azure, Microsoft Office and Bing data and the information and produced results flow back to Microsoft, Microsoft could close to some extent the artificial intelligence, AI gap with Alphabet, owner of the Google search engine, according to Wolfteam Ltd.

Amazon And AI

Amazon is using artificial intelligence, AI as part of its Amazon Web Services offering.

Amazon is the leader in the more than 500 billion USD annual revenue cloud computing market with a 40 % market share.

Cloud computing is based on artificial intelligence, AI algorithms.

Amazon's usage of AI and its cloud computing advantage could bring Amazon's market capitalization to 3.1 trillion USD from the 1.59 trillion USD current Amazon's market capitalization , according to Wolfteam Ltd.'s revenue and profitability projections.

What is more, the huge amount of information Amazon gathers via its services, cloud computing mainly, could be better stored, managed, analyzed, modeled via artificial intelligence, AI and prescient insights be derived with which Amazon could better its cloud computing offering and serve more and better targeted advertisements. Internet advertisements is already more than 10 billion USD in annual business for Amazon.

All in all, the artificial intelligence, AI promise makes Amazon undervalued

Alphabet, Google And AI

Some analysts claim Alphabet Inc, the owner of the Google search engine has fallen behind OpenAI's ChatGPT in the artificial intelligence, AI race.

This is not entirely correct, according to Wolfteam Ltd.'s corporate view.

Alphabet Inc, via Google search possesses huge treasure trove of information, which if analyzed efficiently via artificial intelligence, AI algorithms could provide for a highly efficient artificial intelligence, AI application like a AI chat bot. Alphabet Inc, the Google owner has introduced Gemini, its very own artificial intelligence, AI model which in preliminary results beats OpenAI's ChatGPT-4 in multitude of tests.

Alphabet, Google owner has introduced its very own artificial intelligence chat bot Bard, which shows a lot of promise.

In Wolfteam Ltd.'s view, Alphabet, with the information gathered via its search engine Google has significant informational advantage in the artificial intelligence, AI wars. Artificial intelligence, AI models need data to be trained. Data is the new oil. Data is the oil of the 21st century.

And Alphabet, Google's owner has arguably the largest set of data on its servers. Worldwide.

Bitcoin Is Udervalued On AI

Bitcoin is connected to AI via the blockchain, which creates Bitcoin using the blockchain hashing tree algorithm to mine Bitcoin.

Artificial intelligence, AI now is driving every corner of information technology and is experiencing exponential growth. AI and Bitcoin's price growth and public acceptance go hand in hand, since Bitcoin relies on AI to exist and proliferate.

Apple And AI. A New Strategy For Growth For Apple

 

Apple was the first major technology company to start an artificial intelligence, AI chat bot with Siri.

That said, Apple's Siri usage has stalled lately. OpenAI ChatGPT has taken the world by storm, although OpenAI's ChatGPT has also run into controversy with the temporary Sam Altman ouster and Sam Altman's return back to the firm.

With the iCloud and the App Store Apple has gathered a huge treasure trove of information on its users. This information could be stored and modeled via artificial intelligence, AI algorithms to derive insights about user behavior, which can be fed into Siri.

Apple's business model does not entail gathering and analyzing user data to serve users advertisements. Actually, internet advertisements could increase Apple's market capitalization to 5.4 trillion USD in value.

But given the fact that Apple claims it does not analyze users' data to serve internet advertisements, the user data could be modeled via artificial intelligence, AI and fed into Siri to produce search results.

Apple is currently paying around 12 billion USD to Alphabet Inc, Google's owner to use the Google search engine as the default search engine in iPhons, iPads, Macintosh computers. That is a huge sum of money, which Apple could save if it were to use its artificial intelligence, AI chat bot Siri to produce search results, much as OpenAI, which is now more or less controlled by Microsoft does with ChatGPT.

Siri with iCloud and App Store users data and information could become a powerhouse on its own and drive ever more users to Apple's services, by buying its iPhones, iPad and Macintosh computers first, of course.

If Apple utilizes AI more, Apple's intrinsic worth could touch 7.3 trillion USD in the next 12 years, according to Wolfteam Ltd.'s revenue and profitability projections and comparables estimates.

Clorox Valuation

 

Clorox, the American manufacturer of consumer and professional products is undervalued according to Wolfteam Ltd.

Clorox with revenue of 7.39 billion USD, growing at 3.97 %, net profit margin of 2.02 % for 2022 has an intrinsic value of 22 billion USD, compared to Clorox's market capitalization of 17.50 billion USD.

In short, the market is extrapolating the recent quarters' average net profit margin of around 4 %, one quarter with negative profitability into the future.

It has to be noted that the trailing annual dividend yield of Clorox is 3.4 %, which also makes Clorox undervalued.

In its first fiscal quarter of 2024 Clorox reported revenue of 1.386 billion USD:

Clorox Reports Q1 Fiscal Year 2024 Results, Updates Outlook

November 1, 2023

Download PDF

OAKLAND, Calif., Nov. 1, 2023 /PRNewswire/ -- The Clorox Company (NYSE: CLX) today reported results for the first quarter of fiscal year 2024, which ended Sept. 30, 2023.

First-Quarter Fiscal Year 2024 Summary

Following is a summary of key results for the first quarter, which was marked by the impact of the previously announced cyberattack. All comparisons are with the first quarter of fiscal year 2023 unless otherwise stated.

• Net sales decreased 20% to $1.4 billion compared to a 4% net sales decrease in the year-ago quarter. The decrease was driven largely by lower volume resulting from the cyberattack, partially offset by favorable price mix. Organic sales¹ were down 18%.
• Gross margin increased 240 basis points to 38.4% from 36.0% in the year-ago quarter, due to the benefits of pricing and cost-savings initiatives, partially offset by the impact of lower volume.
• Diluted net earnings per share (diluted EPS) decreased 75% to 17 cents from 68 cents in the year-ago quarter. This decrease includes current-period investments in the company's long-term strategic digital capabilities and productivity enhancements (17 cents) and incremental expenses resulting from the cyberattack (15 cents).
• Adjusted EPS¹ decreased 47% to 49 cents from 93 cents in the year-ago quarter, due to lower volume partially offset by the benefits of pricing and ongoing cost-savings initiatives.
• Year-to-date net cash provided by operations was $20 million compared to $178 million in the year-ago period, representing an 89% decrease.
  

 

Bitcoin Is Actually AI

The algorithm underlying the blockchain algorithm is the hashing tree algorithm, which  part of the artificial intelligence, AI algorithms set.

The hashing tree, random forest algorithm is one of the most important artificial intelligence, AI algorithms.

The hashing tree, random forest algorithm is used to mine and validate Bitcoin transactions. And Bitcoin underlies the whole cryptocurrencies industry. So it is safe to say that the hashing tree, random forest algorithm, which is artificial intelligence AI is underlying Bitcoin, cryptocurrencies.

So in short, Bitcoin, cryptocurrencies is AI.

Apple's Next Avenue Of Growth Could Be Cloud Computing

Apple's iCloud may be a passive service currently, without Infrastructure as a Service Offering or Machine Learning, Artificial Intelligence services, but iCloud, the cloud computing storage mainly service of Apple could become the next avenue of revenue and profit growth for Apple, the Cupertino based most valuable company in the world, according to Wolfteam Ltd.

Apple could harvest, store, analyze and make recommendations based on the data stored in the iCloud accounts of its users. The same way the App Store makes recommendations based on user download preferences for software applications. Now around 30 % of Apple's revenue comes from its App Store services revenue, where Apple takes a cut of 30 % from every App Store purchase.

iCloud represents a huge treasure trove of information, which if analyzed, modeled via artificial intelligence, AI could provide priceless insights and possibly bring tens of billions of profit.

Cloud Stocks Are Undervalued On AI And Bitcoin

Cloud computing provides for powerful computing, without keeping computing resources on premise.

Artificial intelligence, AI algorithms and Bitcoin mining and producing require huge computing resources, which benefits cloud computing stocks like Amazon with Amazon Web Services, Microsoft with Azure and Alphabet with Google Cloud, according to Wolfteam Ltd.'s view.

Eaton Corporation PLC Valuation

 

Eaton Corporation PLC, the American-Irish multinational power management company is undervalued, according to Wolfteam Ltd.

Eaton Corporation PLC with 20.75 billion USD revenue, growing at 5.73 %, net profit margin of 11.86 % Eaton Corporation's intrinsic value is 121 billion USD compared to its market capitalization of 94.83 bln. USD.

In the third quarter of 2023 Eaton reported 5.9 billion USD of sales, growing at 11 % year on year from the third quarter of 2022:

Date October 31, 2023
Eaton Reports Record Quarterly Results With 18% Backlog Growth; Raises
Guidance
• Quarterly earnings per share of $2.22 and record quarterly adjusted earnings
per share of $2.47, up 22% over 2022
• Record quarterly sales with 9% organic sales growth and record quarterly
segment margins of 23.6%, 240 basis points above the third quarter of 2022,
with 46% incremental margin
• Third quarter record operating cash flow of $1.1 billion, up 18%
• Raised adjusted earnings per share guidance midpoint to $9.00, reflecting 19%
growth over 2022
DUBLIN – Intelligent power management company Eaton Corporation plc (NYSE:ETN) today
announced that earnings per share were $2.22 for the third quarter of 2023. Excluding
charges of $0.21 per share related to intangible amortization, $0.03 per share related to
acquisitions and divestitures, and $0.01 per share related to a multi-year restructuring
program, adjusted earnings per share of $2.47 were a quarterly record and up 22% over the
third quarter of 2022.
Sales in the quarter were $5.9 billion, a quarterly record and up 11% from the third quarter of
2022. Organic sales were up 9%, and positive currency translation added 2%.
Segment margins were 23.6%, a quarterly record and a 240-basis point improvement over
the third quarter of 2022.
Eaton/Page 2
Operating cash flow was a third quarter record $1.1 billion, and free cash flow was $913
million, up 18% and 10%, respectively, over the same period in 2022.
The company’s backlog was up 18% over the third quarter of 2022, up 4% sequentially

All in all, the market underestimates Eaton's recent revenue growth and profitability's influence on revenue and profit and ultimately Eaton Corporation PLC's market capitalization in the mid-term, according to Wolfeam Ltd.'s corporate view.

Bitcoin Is Undervalued On The Federal Reserve Pivot

 

Bitcoin, cryptocurrencies, as most other growth technologies is undervalued short-term, now that the Federal Reserve has pivoted towards lower interest rates.

Lower interest rates will make taking out margin loans easier, the capital of which will mostly flow into risky investments like crypto.

In addition, lower rates make venture capital investing more attractive. Venture capital funds, when they attract more money will invest, as usual in risky projects, Bitcoin based businesses including.

Bitcoin's price could reach and surpass 71 000 USD in 2024, according to Wolfteam Ltd.'s corporate view.

Federal Reserve And Technology Stocks

 

After the Federal Reserve obviously pivoted this week towards striving to lower the Federal Funds Rate in the coming months, many Wall Street research analysts forecast a warm spring or rising levels for stock markets, US technology stocks especially.

Actually, with high interest rates levels already, we could see a medium banking crisis in the coming months as the one with Silicon Valley Bank and First Republic Bank, which caused a real crisis with US regional banks and their stock prices fell more than 30 % on average in the space of a couple of weeks.

Otherwise, technology stocks are set to benefit in the mid-term from the Federal Reserve lowering interest rates levels. Lower rates will feed into cheaper loans form medium US technology enterprises and will increase the attractiveness of US venture capital funds, which make for about 70 % of the venture capital investments in technology startups globally.

Artificial intelligence, AI, Bitcoin, cryptocurrencies, biotechnology, health technology, deep learning stocks are set to benefit the most from the lower rates pressure administered by the Federal Reserve, according to Wolfteam Ltd.'s corporate view. Or emerging technology companies, with other words.

Particular names are Amazon, Alphabet, Google owner, Meta, Facebook owner, Microsoft, OpenAI, Apple, Arista Networks, NVIDIA, Tesla, Coinbase, Robinhood Markets, Moderna, other biotechnology companies, Snap, Snapchat owner, Pinterest, Roku, Netflix. Other emerging tech companies, also.

AI Stocks. Artificial Intelligence Powered Stocks

 

Artificial intelligence, AI stocks could be deemed NVIDIA, Alphabet, Google owner, Microsoft, Amazon, Apple, Arista Networks.

NVIDIA, which creates the graphical processing units and semiconductors for artificial intelligence, AI is overvalued by 40 % short-term. In the long-term, 7-10 years from now NVIDIA could end up with 3.4 trillion USD market capitalization, though. NVIDIA produces graphical processing units and servers, which are used in artificial intelligence, AI. The architecture of NVIDIA's AI processors and transistors is top notch. NVDIA exhibits extremely high profitability of circa 33 %, which partly substantiates its current market capitalization. As long as NVIDIA is at the forefront of artificial intelligence, AI processors production, NVIDIA's potential market capitalization will be measured in trillions of USD.

Alphabet, Google owner is undervalued on the amount of information it possesses. Alphabet's intrinsic worth is 4.8 trillion USD, if Alphabet, via its Google stored information begins to harvest, store, manage, analyze and most importantly derive deep insights from the information it possesses. Here artificial intelligence, AI could help Alphabet, via its Google property enormously. Google has other ancillary properties like YouTube, AdSense, Boston Dynamics, Google Cloud which will substantially change our world with time. Google Cloud storage and analysis relies heavily on artificial intelligence, AI algorithms to function. Artificial intelligence, AI algorithms are used for video recommendations in YouTube and are the main reason for the huge success of YouTube. Videos are a mega trend and as long as YouTube is placed at the cusp of videos production, only the value of YouTube could reach 1 trillion USD in the long-term future, according to Wolfteam Ltd.'s forecasts. It is no secret that even Google relies almost exclusively on an artificial intelligence, AI neural network to produce its search results.

 

Android is another avenue of growth for Alphabet Inc. Android via its Play Store gathers unbelievable, huge amounts of information about Android users which can be monetized via internet advertisements. Play Store gets a cut of 30 % from all fees gathered by software applications posted on the Play Store. This revenue can be increased in two ways. Alphabet, Google owner attracts, enlarges the number and market share of Android mobile operating system users and attracts better developers on its Play Store. Alphabet is trying to develop its own line of mobile phone devices via the Nexus mobile phone offerings, but this strategy needs tweaking to work better and enlarge the market share of Nexus phones. On the other hands by growing the market share of Android users, Alphabet can make itself more attractive, so the developers of the hottest software applications like new electronic games, news applications, sports applications first choose Android over Apple's App Store.

Microsoft is also undervalued on AI. Microsoft's intrinsic worth is 3.7 trillion USD because mainly of its artificial intelligence, AI based cloud offering Azure. Here the enlarged information quantity derived from the cloud version of Microsoft Office also plays a role. AI could help Microsoft analyze its data better. Azure, the cloud subsidiary of Microsoft uses extensively artificial intelligence, AI to store, analyze and output information. Artificial intelligence, AI is being more and more daily integrated into the functioning of Microsoft office. Microsoft owns 49 % of OpenAI, the producer otf the ChatGPT chat bot neural network which is the latest craze in artificial intelligence, AI.  ChatGPT is ubiquitous already all over the world and its artificial intelligence, AI neural network is producing excellent chat results. ChatGPT can even create software applications on its own. Wolfteam Ltd.'s house view is that OpenAI's ChatGPT artificial intelligence, AI neural network chat bot is still far away from rivaling Alphabet's Google, but as long OpenAI continues developing ChatGPT's artificial intelligence, AI without the distraction of corporate scandals and turmoils both OpenAI's and Microsoft's future is bright.

Amazon is also undervalued. Amazon's intrinsic worth is 3.2 trillion USD on the AI, artificial intelligence cloud offering of Amazon Web Services. Amazon Web Services relies heavily on artificial intelligence, AI to produce its results and drive storage. Amazon's US delivery business is mildly profitable, while its international delivery business is loss making. Amazon Web Services powered by artificial intelligence, AI is mainly delivering the profits for Amazon. Amazon Web Services exhibits net profit margins of around 20 %. In addition Amazon now is the third largest corporation in revenue from internet advertisements behind only Alphabet's Google property and Meta's Facebook. 

Actually, cloud computing is forecast to reach 700 billion USD in revenue in a couple of. Amazon is the leader in cloud computing, especially the most important part of Infrastructure as a Service, which makes it poised for huge revenue and profit growth of Amazon Web Services offering. Cloud computing is the future of computing and via the artificial intelligence, AI algorithms that Amazon is using to power it, Amazon is set to become a 4 trillion USD companies in an optimistic case. Through the last decades Amazon was plagued by its low or even negative profitability, which many Wall Street analysts argued makes it difficult to substantiate Amazon's hundreds of billions of USDs and now more than a 1 trillion USD market capitalization. The scalability of Amazon Web Services cloud offering is very profitable and could slowly solve the net profit problem of Amazon. What is more, via its cloud offering Amazon also gathers huge thousands of terabytes of unique information on its users which could be monetized in the future.

Apple is slightly undervalued also on the amount of data which Apple possesses which could be analyzed better with artificial intelligence, AI. Apple's intrinsic worth is 3.8 trillion USD. Apple already uses artificial intelligence, AI algorithms for application recommendations in its App Store, which is the growth engine behind Apple's services revenue. 

Apple relies and stakes its future on its services revenue. Apple's App Store powered by artificial intelligence, AI neural networks is instrumental in Apple's future. Around 30 % of Apples' quarterly revenue already is derived from its services business. 20 % from each Apple's Macintosh, iPhone and iPad sales is booked as services revenue. And many of Apple's own applications like its Keynote, Numbers, Pages office suite use artificial intelligence, AI. Apple is designing and developing its own computer chips now with a focus on artificial intelligence, AI. 

 

The new chips M1 by Apple are supposed to process faster large amounts of data which will make easier doing artificial intelligence, AI modelling. All said, though, Apple moves predominantly on the inertia inherited from Steve Jobs' time at the company. Macintosh computers, iPhone and iPad were all developed during Steve Jobs's time at Apple. And 75 % of the revenue Apple makes every year comes from Macintosh computers, iPhone and iPad. Even the services revenue Apple gets is tightly knit together with the Macintosh computers, iPhone and iPad. Apple Inc needs a new, breakthrough technology product. Rumor has long had it that Apple is trying to develop an Apple car, under the name project Titan. In addition, Apple has said on numerous occasions it has its eye on Apple television set. Both an Apple car and an Apple TV will rely heavily on artificial intelligence, AI. Cars, nowadays are just computers on wheels. Artificial intelligence, AI will ease the selection of channels and programs while watching TV and make for great viewing recommendations. Added to that, Apple possesses a huge treasure trove of information gathered via the Macintosh computers, iPhone and iPad and the App Store. Artificial intelligence can be used to gather, store, analyze and derive insights from that information better. What is more, via its iCloud offering Apple is in the more than 1 trillion USD annual revenue in five years cloud computing market. Apple does not yet offer the cloud computing's crown jewel Infrastructure as a Service. Apple just offers iCloud storage. Still, even only with the iCloud storage Apple possesses huge amount of information, which could be store, managed and analyzed via artificial intelligence, AI.

Arista Networks, the circuits and switches provider for artificial intelligence, AI information processing is also undervalued. Arista Networks' intrinsic worth is 160 billion USD in the long run, according to Wolfteam Ltd.'s corporate view. Arista Networks is extremely profitable exhibiting net profit margins of around 33 % powered by artificial intelligence, AI algorithms. Arista Networks, with its circuits and switching powering artificial intelligence, AI computers and services could quite possibly become what is Cisco for the internet. Arista Networks is basically providing the hardware for large data centers, cloud computing and artificial intelligence, AI environments. Via Arista Networks' switches more efficient distribution of resources for artificial intelligence, cloud computing can be achieved. Data centers are vital for artificial intelligence, AI computing and Arista Networks is at the forefront of that development. In short, Aritsta Networks provide the network infrastructure for AI networking and Cloud networking which are indispensable for today's and tomorrow's computing. Via Arista Networks offering the power of artificial intelligence and the cloud is magnified significantly.

All in all, artificial intelligence, AI is the future of computing, but the initial bubble, as with any new, exciting technology is overblown a bit at the moment, according to Wolfteam Ltd. After the artificial intelligence, AI bubble bursts a new AI hyper growth era will ensue, according to Woflteam Ltd.'s projections.

Today's Market. 15th December 2023

 

 

The US stock market should close higher today measured by the main indices.

The Federal Reserve pivot towards lower interest rate new from yesterday Federal Reserve's statement and press conference is too strong a gravitational pull higher for US stocks.

Once the Federal Reserve sets a target significantly lower for the Federal Funds Rate, its key rate, interest rates levels the world over will feel a pull downwards and slowly interest rates levels globally will start to decrease.

Lower interest rate levels mean lower loan payments on corporate loans for large corporations, small and medium enterprises. Large corporations, small and medium enterprises could start returning the excess cash from loans to shareholders via stock buybacks, which will pull the general US stock market level higher and individual stocks will mostly increase. 

Today the US stock market will be mainly analyzing the Federal Reserve pivot news from yesterday.

Possible beneficiaries in the mid-term are Bitcoin stocks like Coinbase, Robinhood Markets, social media up and coming stocks like Snap and Pinterest, as well as commodities producers like Exxon Mobil, Chevron, BP, Total, Shell and gold miners such as Barric Gold, Wheaton Precious Metals, Eldorado Gold Corporation, Yamana Gold. Financials like Goldman Sachs, JP Morgan, Morgan Stanley will also benefit.

Basically, the Federal Reserve pivot will lift if not all, than most boats, stocks in the coming months, according to Wolfteam Ltd.'s  corporate view.

 

Moderna Valuation. Cancer Treatment

 

Moderna Inc, the American biotechnology company is undervalued according to Wolfteam Ltd.'s revenue and profitability projections and estimates.

Yesterday, Moderna announced a new medicine that treats advanced stage melanoma, skin cancer relatively successfully, according to the latest trials:

"At a median planned follow-up of approximately three years, mRNA-4157 (V940) in combination with KEYTRUDA reduced the risk of recurrence or death by 49% (HR=0.510 [95% CI, 0.288-0.906]; one-sided nominal p=0.0095) and the risk of distant metastasis or death by 62% (HR=0.384 [95% CI, 0.172-0.858]; one-sided nominal p= 0.0077) compared to KEYTRUDA alone in stage III/IV melanoma patients with high risk of recurrence following complete resection"

One of Moderna's goals is to develop anti cancer vaccines and medicines. Relying on messenger RNA technology, Moderna is one of the most advanced medical companies of today. Its messenger RNA COVID-19 vaccine was a blockbuster and it still sells well today, as many countries like Austria, for example are experiencing coronavirus bouts. COVID-19 is here to stay with humanity, all be it in a lesser intensity and Moderna's vaccine is still going to sell for billions of USD a year in the near future, according to Wolfteam Ltd.'s corporate view.

Moderna's intrinsic value is 123 billion USD, compared with Moderna's current market capitalization of 32.74 billion USD. Wolfteam Ltd.'s house view is that Moderna will be able to sell its COVID-19 coronavirus vaccine for between 5 to 8 billion USD a year in the next 5 to 7 years on average. On top of that Moderna will develop successfully cancer vaccines and pharmaceuticals for different stages and different types of cancer.

In addition, the coronavirus 2020 - 2022 period showed that Moderna Inc, by selling its COVID-19 coronavirus vaccine can achieve 66 % net profit margin profitability a year, which is extremely high profitability, even for a pharmaceutical company.

 

The Federal Reserve Decision. Stocks That Could Benefit

 

The Federal Reserve, the United States Central Bank pivoted in the end of its two day meeting yesterday by signalling Federal Funds Rate decreases are imminent.

Wall Street research analysts expect the Federal Reserve to lower interest rates levels in June or the second half of 2024.

Stocks that are likely to benefit from the Federal Reserve decreasing the Federal Funds Rate are Coinbase, the cryptocurrencies exchange, Robinhood Markets, the stocks and cryptocurrencies broker, Snap Inc, the producer of the Snapchat application, Eldorado Gold Corporation, Barrick Gold, Wheaton Precious Metals and many other gold miners, according to Wolfteam Ltd.

Here is a statement from the Federal Reserve Statement issued yesterday:

"The Committee will continue to assess additional information and its implications for monetary policy. In determining the extent of any additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook."

All in all, a major change of the Federal Reserve stance from rigid quantitative tightening to loosening monetary policy and financial conditions relatively soon, probably beginning in the second half of 2024, according to Wall Street investment banks' research analysts forecasts.

Huntington Bancshares Valuation

Huntington Bancshares Incorporated, the American bank holding company headquartered in Ohio is undervalued, according to Wolfteam Ltd.'s revenue and profitability projections and comparables estimates.

With 6.96 billion USD revenue, growing at 16.75 %, net profit margin of 32.17 % for 2022, Huntington Bancshares' intrinsic value is 24 billion USD, compared with Huntington Bancshares' market cpaitalization of 17.85 billion USD.

Added to that is a big annual dividend yield for Huntington Bancshares of 5.03 %, which also makes Huntington Bancshares look undervalued. With Price/Earnings ratio 8.06 Huntigton Banchsares' undervaluation is even more glaring. Barring a deep recession of the US economy, Huntington Bancshares will keep its exceptional profitability of circa 30 % average net profit margin for the last five years.

All in all, Huntington Bancshares, as well as many other US regional corporate banks are undervalued.

Below are Huntington Bancshares latest 3rd Quarter 2023 results:

2023 Third-Quarter Highlights:

• Earnings per common share (EPS) for the quarter were $0.35, flat from the prior quarter, and were lower by $0.04 from the year-ago quarter. Excluding the after tax impact of Notable Items, adjusted earnings per common share were $0.36.
• Net interest income increased $22 million, or 2%, from the prior quarter, and decreased $36 million, or 3%, from the year-ago quarter.
• Pre-Provision Net Revenue (PPNR) decreased $4 million from the prior quarter to $798 million, and decreased $59 million, or 7%, from the year-ago quarter. Excluding Notable Items, adjusted PPNR increased $6 million, or 1%, from the prior quarter to $813 million, and decreased $54 million, or 6%, from the year-ago quarter.
• Cash and cash equivalents and available contingent borrowing capacity of $91 billion at September 30, 2023, representing 204% of uninsured deposits.
• Average total deposits increased $2.6 billion, or 2%, from the prior quarter and $2.1 billion, or 1%, from the year-ago quarter.
  • Ending total deposits increased $839 million, or 1%, from the prior quarter and $2.6 billion, or 2%, from the year-ago quarter.
  • Ending core deposits increased $1.3 billion, or 1%, from the prior quarter reflecting continued momentum in consumer deposit gathering and ongoing focus on acquiring and deepening primary bank relationships.
• Average total loans and leases decreased $561 million from the prior quarter to $120.8 billion, and increased $3.8 billion, or 3%, from the year-ago quarter.
  • Average total commercial loans and leases decreased $1.2 billion, or 2%, and average total consumer loans increased $677 million, or 1%, from the prior quarter.
• Net charge-offs of 0.24% of average total loans and leases for the quarter, below the through the cycle target range.
• Nonperforming asset ratio of 0.52%.
• Allowance for credit losses (ACL) of $2.4 billion, or 1.96%, of total loans and leases at quarter end.
• Common Equity Tier 1 (CET1) risk-based capital ratio increased 28 basis points to 10.10%, continuing the trend of capital expansion.
• Tangible common equity (TCE) ratio decreased 10 basis points from the prior quarter to 5.70%, and increased 38 basis points from a year ago.
• Huntington was ranked first nationally for SBA 7(a) loan originations by volume for the sixth year in a row for SBA fiscal year 2023 and the 15th year in a row that Huntington has been the largest originator, by volume, of SBA 7(a) loans within footprint.

COLUMBUS, Ohio, Oct. 20, 2023 /PRNewswire/ -- Huntington Bancshares Incorporated (Nasdaq: HBAN) reported net income for the 2023 third quarter of $547 million, or $0.35 per common share, a decrease of $47 million, or $0.04, from the year-ago quarter.

Bitcoin Stocks Valuation

 

Bitcoin technology stocks are Coinbase, Nu Holdings Ltd. and Robinhood Markets.

Coinbase is a cryptocurrencies exchange. Nu Holdings Ltd. is a cryptocurrencies bank. Robinhood Markets is a stocks, crypocurrencies broker.

Coinbase can increase threefold, Nu Holdings Ltd.'s market capitalization can rise two times and Robinhood Markets' stock price can rise four times from current levels.

Bitcoin, cryptocurrencies are a global disruptor, which already partly function as means of exchange, unit of account, store of value, which are the three main definitions of money. The key word here is partly, because Bitcoin, cryptocurrencies are volatile, especially on the downside, which hinders their acceptance as money. But as more and more hedge fund managers and asset managers enter Bitcoin, Ethereum, Ripple, cryptocurrencies trading the Bitcoin, cryptocurrencies asset class liquidity will increase and the downside volatility will diminish.

The Federal Reserve is widely expected to embark on a Federal Funds Rate cutting cycle in the second half of 2024. Lower interest rates levels enhance the attractiveness of venture capital funds and more and more money starts flowing into venture capital and later finds itself into cryptocurrencies investments and cryptocurrencies projects.

Part of this money will flow into Coinbase, Nu Holdings Ltd. and Robinhood Markets and raise their market capitalisations.

Chipotle Valuation

 

Chipotle Mexican Grill, Inc, the American chain of casual restaurants specializing in Mexican food is overvalued, according to Wolfteam Ltd.'s revenue and profitability projections and comparables estimates.

With 8.63 billion USD revenue, growing at 14.41 %, net profit margin of 10.41 % Chipotle's inrinsic worth is 52 billion USD compared with Chipotle's current market capitalization of 63.00 billion USD.

Market participants seem to be extrapolating Chipotle's most recent 2022 profitability and revenue growth in the future. In the last 5 years, however, Chipotle's profitability was circa 5 % net profit margin and revenue grew on average 8 % a year. The market seems to be overextending Chipotle's most recent performance into the future, which is not a highly realistic assumption, according to Wolfteam Ltd.'s corporate estimates.

Rollins Inc Valuation

 

Rollins Inc, the American pest control company is overvalued, according to Wolfteam Ltd.'s revenue and profitability projections and comparables estimates.

With 2.70 billion USD revenue, growing at 11.20 %, net profit margin of 13.67 % for 2022 Rollins' intrinsic worth is 14.7 billion USD compared with Rollins' market capitalization of 20.05 billion USD.

The growth component of Rollins Inc' valuation seems to be overextended by the stock market into overvaluation, according to Wolfteam Ltd.'s view.