GMT EIGHT

Evercore: NRG Energy's (NRG.US) stock price hits a new high but is still undervalued; target price raised to $126.

NRG Energy (NRG.US) saw its stock price hit an all-time high on Tuesday, with Evercore ISI raising its target price from $74 to $126 and upgrading its rating from "neutral" to "overweight," believing that the stock is still undervalued compared to its peers even after strong performance in 2024. Evercore analyst Durgesh Chopra stated that NRG Energy's earnings per share growth target exceeds 10% annually, and by 2029, the company plans to return $8.8 billion in capital to shareholders through dividends and buybacks. He added that the company's potential advantages are being underestimated by the market, as NRG Energy is expected to benefit further from increasing electricity demand and higher prices. With the integration of Vivint nearly complete, Chopra stated that the value proposition provided by the business to NRG Energy is evident: since the completion of the transaction in the first quarter of 2023, NRG Energy's customer base has increased by approximately 200,000, revenue per user has increased by about 10%, and already attractive profit margins have further increased by around 100 basis points considering NRG Energy's retention rate of around 90% and optimized pricing strategies, these results should continue to improve. The analyst also noted that NRG Energy announced a partnership with Renew Home and Alphabet Inc. Class C in the third quarter of 2024 to develop a 1 Gigawatt residential VPP in Texas, which will enable NRG Energy to develop energy management solutions for customers through smart thermostats, allowing customers to save money, optimize energy usage, and provide enhanced grid stability.

30 min ago

"Microsoft Corporation (MSFT.US) 'loosens its grip': Allows OpenAI to use other cloud services"

Microsoft Corporation (MSFT.US) has changed its longstanding agreement with OpenAI, now allowing the artificial intelligence startup to use cloud computing services from competitors. In a statement on Tuesday, Microsoft Corporation said that the agreement will continue until 2030, and when OpenAI seeks computing power to train and run AI models, Microsoft Corporation will have priority. Previously, Microsoft Corporation was the exclusive cloud provider for OpenAI, but last year Microsoft Corporation granted a one-time waiver, allowing the startup to purchase some capacity from Oracle Corporation (ORCL.US). Microsoft Corporation also stated that OpenAI can now build some of its own cloud computing capacity, mainly for research and model training. This change comes as OpenAI, SoftBank Group, and Oracle Corporation announced the establishment of a joint venture worth $50 billion to build cloud computing data centers in the United States. President Donald Trump announced the plan named "Stargate" on Tuesday. Microsoft Corporation stated that it will provide technology for the joint venture, but will not invest any money. Microsoft Corporation also stated that OpenAI recently made a "new significant" commitment to continue using Microsoft Corporation's Azure cloud services to support its AI products. Additionally, the Federal Trade Commission (FTC) released a report last Friday expressing concerns over Microsoft Corporation's investment of up to $13 billion in OpenAI, which could extend the tech giant's dominance in the cloud computing field to the emerging AI market. The FTC criticized the practice of cloud service giants investing in AI companies to benefit their own businesses. Many investments exist in the form of credits for cloud computing services, requiring AI startups to consume on these platforms, thus increasing the cost for AI startups to switch to collaboration platforms.

1 h ago

UBS Group AG: Blackwell's fourth quarter may generate revenue of $9 billion, maintains NVIDIA Corporation's (NVDA.US) target price at $185.

NVIDIA Corporation's stock (NVDA.US) has remained relatively flat since its last quarterly earnings report, but UBS Group AG predicts that the company's revenue from its latest production line will exceed previous expectations due to optimistic sentiment around the Blackwell chip. UBS Group AG analyst Timothy Arcuri has maintained a target price of $185 for NVIDIA Corporation. In a report to clients, Arcuri wrote, "First, we believe that the yield on the Blackwell chip has improved, and the combination of the fourth quarter (January) and the first quarter (April) is rapidly shifting from Hopper to Blackwell." Additionally, based on Foxconn's latest performance, any hardware issues that NVIDIA Corporation may face have recently seen significant improvement as the company is delivering B200 and GB200 processors to partners, with rack deliveries already underway. Arcuri added, "Therefore, we now see revenue from Blackwell in January at around $9 billion (compared to previous expectations of around $5 billion, with supply chain capacity supporting up to $14 billion), but we expect a decline in Hopper in January. We forecast revenue of $42 billion (data center) for the fourth quarter (January) and still $47 billion for the first quarter (April)."

1 h ago

"Bitcoin whale" MicroStrategy (MSTR.US) approved for stock increase to continue to surge on the "buying coins" road.

Foreign media quoted the minutes of the shareholders' meeting as reporting that MicroStrategy shareholders have approved the company to increase its authorized Class A common stock by 30 times to help fund the purchase of Bitcoin. According to the records, shareholders approved increasing the authorized Class A common stock from 330 million shares to 10.3 billion shares, and the authorized preferred stock from 5 million shares to 1 billion shares. Both amendments were approved with 56% of the votes. MicroStrategy Chairman Michael Saylor owns approximately 47% of the voting rights of the company. The goal of company chairman and co-founder Michael Saylor is to increase the company's Bitcoin holdings. Due to the large purchase of Bitcoin, the company is now referred to as a "Bitcoin proxy," with approximately $49 billion worth of Bitcoin on its balance sheet at the recent price of $108,000 per Bitcoin. This increase in stock holdings will potentially make MicroStrategy's outstanding shares exceed those of the top five components of the Nasdaq 100 index, including NVIDIA Corporation, Apple Inc., Alphabet, and Amazon.com, Inc. Prior to the shareholder vote on Tuesday, the "Bitcoin financial company" announced a purchase of $1.1 billion in Bitcoin. MicroStrategy has been buying Bitcoin for 11 consecutive weeks and currently holds over $47 billion worth of Bitcoin, representing over 2% of all Bitcoin currently in existence. The company plans to raise $42 billion in funds by 2027 to continue holding Bitcoin. Since Donald Trump was elected president, expectations of regulatory oversight on cryptocurrency entering mainstream investment has led to a 35% surge in the value of the largest cryptocurrency, Bitcoin.

1 h ago

Intel Corporation (INTC.US) announced its performance soon, receiving a rating upgrade from HSBC to "Hold".

HSBC Bank has upgraded its rating on Intel Corporation (INTC.US) from "reduce" to "hold" while maintaining a target price of $20. Intel Corporation is scheduled to announce its financial performance for the fourth quarter of 2024 on January 30. The market generally expects adjusted earnings per share of $0.12 and revenue of $13.83 billion. HSBC believes that Intel Corporation will report performance in line with market expectations. Analysts Frank Lee and Pulkit Aggarwal from HSBC Bank stated in an investor report on Tuesday: "Since Intel Corporation announced its second quarter performance on August 2, 2024, the stock has adjusted by about 26%. We believe that the $20 target has been reached and the current pricing is reasonable. We believe that the market has already absorbed the recent uncertainties related to the execution of the IDM 2.0 strategy and the senior management turnover with CEO Pat Gelsinger resigning in December 2024." Lee said: "As we enter the first quarter of 2025, we anticipate some decline in revenue. Our revenue estimate is $12.6 billion, which implies a 9% decrease from the previous quarter, while the market generally expects a 6% decrease. We believe this may be due to lower-than-expected performance in the data center segment. We expect this could put pressure on the gross margin, so our expectation for a first-quarter gross margin of 38.5% is still below the market consensus of 39.1%." HSBC also noted that Intel Corporation has not provided a clear path to achieve its foundry goals. Lee added: "Although we acknowledge that the worst seems to be over for Intel Corporation and all the negative factors in the past few months seem to be priced in, we believe it is still too early to have a clear view on whether the execution of this plan will bring about a full recovery in the business."

2 h ago

Johnson & Johnson's dual immunotherapy combination therapy receives EU approval for first-line treatment of lung cancer, reducing risk by 30%.

Johnson & Johnson (JNJ.US) announced today that the European Commission has approved the combination of Lazcluze (lazertinib) and Rybrevant (amivantamab) for first-line treatment of adult patients with advanced non-small cell lung cancer (NSCLC) carrying epidermal growth factor receptor (EGFR) exon 19 deletions (ex19del) or exon 21 L858R mutations. The approval by the European Commission is based on the results of the phase 3 clinical trial MARIPOSA. The study evaluated the efficacy of Lazcluze in combination with Rybrevant compared to the active control osimertinib for first-line treatment of NSCLC patients with the above-mentioned EGFR mutations. Analysis showed that the combination of Rybrevant with Lazcluze can reduce the risk of disease progression or death by 30% compared to the active control drug. The median progression-free survival (PFS) in the combination therapy group and the active control drug group was 23.7 months and 16.6 months, respectively. Additionally, the median duration of response (DOR) in the combination therapy group was 9 months longer than the active control drug group (25.8 months vs. 16.7 months). On January 7, 2025, Johnson & Johnson announced positive overall survival (OS) topline results, showing that the combination of Lazcluze with Rybrevant met the pre-specified secondary endpoint, providing a statistically significant and clinically meaningful improvement in OS compared to the current standard of care. These landmark OS data will be presented at an upcoming medical conference.

2 h ago

The FDA has approved Johnson & Johnson's Spravato (esketamine) nasal spray for the treatment of adults with treatment-resistant depression (TRD).

Johnson & Johnson (JNJ.US) announced on January 21 that the US FDA has approved its Spravato (esketamine) nasal spray for the treatment of treatment-resistant depression (TRD) in adult patients. Trial results show that Spravato reached the primary endpoint at week 4. Additionally, compared to placebo, it rapidly and significantly improved depressive symptoms in patients within 24 hours. According to the press release, Spravato is the first monotherapy approved to treat adult patients with major depressive disorder (MDD) who have had an inadequate response to at least two oral antidepressants. Currently, approximately 1 in 8 people worldwide suffer from mental illness. Depression is one of the most common mental illnesses, affecting around 280 million people globally. Meanwhile, nearly two-thirds of depression patients do not achieve adequate relief from current treatments. When patients with severe depression do not respond to two or more treatment methods, they may progress to treatment-resistant depression, creating a significant need for new treatment options. The approval was based on positive results from a randomized, double-blind, multicenter, placebo-controlled study. Analysis shows that Spravato monotherapy demonstrated rapid and significant efficacy compared to placebo in improving the total score on the Montgomery-sberg Depression Rating Scale (MADRS). By day 28, Spravato showed numeric improvement in all 10 MADRS items. At week 4, 7.6% of the placebo group and 22.5% of the Spravato group achieved remission (MADRS total score 12). Previous trial results also indicate that patients experienced rapid improvement in the MADRS total score within 24 hours of their first treatment with Spravato, with this change persisting for at least 4 weeks. Spravato nasal spray is a non-selective, non-competitive NMDA receptor antagonist that may help restore neural connections in the brains of patients with depression.

2 h ago

Content is king! Netflix (NFLX.US) has once again won the "streaming game".

Tuesday, Netflix (NFLX.US) solidified its dominant position in the streaming video market by combining live sports events, popular returning series, and unique content such as Beyonce's NFL halftime show, helping it attract a record number of users during the holiday season. In this context, Netflix released record fourth-quarter earnings, with revenue and profits once again exceeding analyst expectations, and added billions of dollars to its share buyback program. User Growth: Relying on Quality Content The streaming pioneer added a record 18.91 million net new users in the quarter, a 44% increase year-over-year, more than twice the expected 9.18 million, bringing its global user base to over 300 million. Growth in these numbers exceeded 70% year-over-year in three regions, including its more mature domestic market of the US/Canada (adding 4.82 million, or 72%, compared to an expected 1.75 million). User growth in the Asia Pacific region was 70%, Latin America grew by 77%, and Europe/Middle East/Africa markets added 5 million, a 1% decline year-over-year. The company's previous best record was 15 million in the first quarter of 2020, driven by the outbreak of the pandemic. Netflix attributed its record membership growth to "broad content strength, product/market fit improvements in all regions, and typical seasonality for the fourth quarter." It also attracted new sign-ups due to recent key content changes, including the second season of its hit series "Squid Game" and the arrival of major sports events such as the boxing match between Mike Tyson and Jake Paul, WWE Raw, and Christmas NFL games. The success of the second season of "Squid Game" also drove subscription growth, making it the platform's largest premiere to date, with 68 million views in the first week alone. According to research firm Antenna, the boxing match between Jake Paul and Mike Tyson set a record for registrations, even surpassing Netflix's first NFL game. The company stated that this event attracted 1.08 billion viewers globally, making it the largest sports event in history in terms of viewership. The global average viewership for the two NFL games Netflix hosted on Christmas reached 30 million, becoming the most-watched football game in history. Earlier this month, Netflix also added WWE "Raw" live. Mike Proulx, head of research at Forrester Research, stated, "It's obvious that content is driving user engagement with streaming services. With the largest subscriber growth numbers, Netflix's focus on high-quality content is a major reason for its strong performance this year and in the fourth quarter." Meanwhile, Netflix announced that this would be the last quarter it reports user numbers, as the company will focus on sales and profits. Previously, its crackdown on password sharing led to a surge in new users. Analysts and investors had expected the benefits of this effort to gradually diminish, but Netflix just announced its biggest year of user additions ever, adding 41 million new customers. Seeking Alpha analyst Brett Ashcroft Green responded, "It will take a quarter to break down how many new subscribers are due to organic content additions and how... In terms of price increases, Netflix stated, "As we continue to invest in programming to provide more value to members, we occasionally ask members to pay a bit more so we can reinvest further to improve Netflix. For this reason, we are adjusting prices for most plans in the US, Canada, Portugal, and Argentina today (affecting our 2025 guidance provided in October 2024)." In the fourth quarter, Netflix's increasingly important ad-supported service accounted for 55% of registered users in the country, with ad-supported plan membership increasing by 30% compared to the previous quarter. Building on this success, the streaming company announced an additional ad-supported membership plan to expand its footprint in 10 out of 12 "advertising countries." Last November, Netflix launched its first-party ad technology platform in Canada. Live programs such as sports events are also crucial to Netflix's expansion in the advertising business. The company shows ads to all members during football and wrestling matches, not just those on lower-priced, ad-supported plans. The streaming giant is planning to enhance its core business further in 2025, launching more series and movies, improving user product experiences, while continuing to develop the advertising business. Additionally, the company will delve into live events and gaming. In 2025, Netflix will see the return of popular series like "Stranger Things" and "Wednesday," which are expected to further attract users and drive growth. The company has secured the broadcast rights for the FIFA Women's World Cup in 2027 and 2031. Netflix stated that this deal showcases its strategy of offering special event programs rather than regular sports programs. Monetization: Price Increases Alongside Advertising Netflix will increase its prices in the US, Canada, Portugal, and Argentina. The price hike announced on Tuesday will raise the standard monthly fee without ads from $15.49 to $17.99, while the standard monthly fee with ads will increase by $1 to $7.99. The premium package with the highest price, including 4K video quality, will increase by $2 to $24.99. Regarding the price increase, Netflix stated, "As we continue to invest in programming to provide more value to members, we occasionally ask members to pay a bit more so we can reinvest further to improve Netflix. For this reason, we are adjusting prices for most plans in the US, Canada, Portugal, and Argentina today (affecting our 2025 guidance provided in October 2024)." In the fourth quarter, Netflix's increasingly important ad-supported service accounted...The advertising sector is slow to start and is expected to not generate substantial economic benefits until before 2026. However, it has already made progress. Most new customers in 12 markets choose advertising plans, the company said that by the end of this year, it will have enough scale to meet the needs of advertisers.The company wrote in the letter, "Our newly established live broadcast program has already provided some must-see moments. Although our live broadcast program may only account for a small portion of our total viewing time and content costs, we believe that this balanced nature will bring tremendous value to our members and our business." Analyst Tim Nollen of Macquarie Securities predicts that as more people sign up for the company's advertising-supported plan, and as Netflix's advertising technology matures, Netflix's ad revenue this year will increase to $20 billion, with live events continuing to drive user sign-ups. As streaming services increase monthly costs and push users towards lower-priced ad-supported plans to increase profitability, this price increase is the latest for consumers. In recent years, companies like Walt Disney Company, HBO, Peacock, Apple Inc., and others have raised prices. Netflix last raised its standard package price in 2022. Seeking Alpha analyst Max Greve said, "This is almost a home run. The company's performance outshines others. The price increase demonstrates management's confidence in their continued focus on pay-sharing and ad-centered approaches. This confidence is justified as subscriptions remain strong. Some of the strongest growth has been in the US and Canada region, which is their highest revenue region. To be honest, such reports are hard to feel optimistic about. One concern may be the scale of sports programming and whether sports programming will dominate entertainment programming as it has on cable television. But this is speculation, and as the market reaction clearly shows, management's strong execution over the past 30 years has benefited them from such doubts." Nevertheless, the surge in advertising and paid subscriptions solidifies Netflix's dominant position in the streaming field. In recent years, as traditional cable TV and broadcast business shrinks, traditional media companies have invested billions to launch their own streaming services to compete with Netflix. While some competitors, including Walt Disney Company and Warner Bros Discovery, have recently turned a profit in the streaming field, they have struggled to match Netflix's market share. Netflix is the most subscribed OTT streaming service in the US, accounting for 30.8% of total OTT subscription revenues in the US. Therefore, Netflix leads in SVOD (subscription video-on-demand) revenue. PP Foresight analyst Paolo Pescatore said, "Netflix has strengthened its leadership position in the streaming market, it is certainly ahead. Compared to competitors, it is now showcasing its strength by adjusting prices, as its program lineup is much stronger and more diverse." Profit Margin The company reported a 16% increase in revenue this quarter, reaching $10.2 billion, its largest increase since the end of 2021, and indicated that sales growth will be faster than expected by 2025. This growth will be partly driven by price hikes. As the company continues to downplay quarterly membership and revenue forecasts, profit margins are increasingly under scrutiny - its fourth-quarter operating margin was 22.2%, significantly higher than a year ago's 16.9% (but still the lowest margin since the fourth quarter of 2024; the third-quarter margin was 29.6%). Netflix expects an operating margin of 28.2% in the first quarter of this year, slightly higher than the 28.1% of the first quarter of 2024. Netflix expects first-quarter revenue to be $10.4 billion, earnings per share of $5.58, both slightly below Wall Street's average expectations. The company also expects revenue to reach $44.5 billion this year, up $5 billion from previous guidance, a 14% increase from the previous year, with an operating margin of 29%. The company also stated that its stock buyback program will increase by $15 billion, bringing the total authorization to $17.1 billion. Last year, Netflix repurchased 9.9 million shares of stock for $6.2 billion. Assuming no major fluctuations in foreign exchange, free cash flow is expected to reach around $8 billion by 2025, with content cash expenditures estimated at around $18 billion.

2 h ago

Weak sales dragging down Apple Inc. (AAPL.US) stock price, NVIDIA Corporation (NVDA.US) regains title as global market leader.

On Tuesday, the stock price of Apple Inc. (AAPL.US) further declined, continuing its recent downward trend, while at the same time, NVIDIA Corporation (NVDA.US) began to "overtake" Apple Inc. and once again become the player with the highest market value in the global stock market. In Tuesday's US stock trading, NVIDIA Corporation's market value exceeded $3.46 trillion, surpassing Apple Inc.'s market value of $3.33 trillion. As of the time of writing, NVIDIA Corporation rose 1.68% to $143.2 in after-hours trading, while Apple Inc. fell 2.7% to $222.03, even though the latter has bounced back from recent lows. The artificial intelligence chip manufacturer NVIDIA Corporation's market value had surpassed Apple Inc.'s in early November last year, but Apple Inc. reclaimed the top position later that month. On December 26th last year, Apple Inc.'s stock price hit a record high of $260.10, but has since dropped by approximately 15%. On Tuesday, after Jefferies Financial Group Inc. and Loop Capital downgraded Apple Inc.'s rating, the company's stock price fell by 4.6%. Jefferies Financial Group Inc. believes that due to the soft sales of Apple Inc.'s phones and the generally sluggish consumer electronics market, they downgraded the stock from neutral to underperform. It is reported that Apple Inc.'s first-quarter financial report will be released on January 30th. Earlier on Tuesday, Counterpoint Research stated that in the fourth quarter of 2024, iPhone sales in China suffered a "Waterloo", dropping by about 18%, while Chinese competitor Huawei took the top spot. The sluggish performance of the product in the Chinese market also led to a 5% decline in global sales, posing a challenge to iPhone sales. Meanwhile, on Tuesday, NVIDIA Corporation's stock price rose. Previously, UBS Group AG stated that they expect the company's latest Blackwell product line to bring in more revenue in the fourth quarter, reaching around $9 billion. Since NVIDIA Corporation released its last quarterly report in November of last year, the company's stock price has remained relatively flat.

3 h ago

Honeywell International Inc. (HON.US) plans to establish a research and development center under its subsidiary Quantinuum, causing a surge in the stock prices of US quantum computing companies.

Honeywell International Inc.'s Quantum Software division Quantumannounced the establishment of a new research and development center in New Mexico, and quantum computing stocks on the US stock market surged in response. Quantinuum stated that the planned center will focus on photonics technology, which will help advance ion trap quantum computing technology. Quantinuum President and CEO Rajeeb Hazra said, "As a leader in the field of quantum computing, Quantinuum has found an ideal partner in New Mexico. The state's vibrant technology ecosystem and highly skilled workforce align perfectly with our strategic goals." It was previously reported that Quantinuum will receive an investment of 800 million dollars, with 210 million dollars allocated by the state government, 220 million dollars allocated by the federal government, and an additional 350 million dollars from quantum companies investing in the state. Following the announcement, Honeywell International Inc. saw a 1.1% increase in its stock price, while other quantum computing stocks surged, with Arqit Quantum (ARQQ.US) rising by 9%, IonQ Inc (IONQ.US) and Quantum Computing (QUBT.US) rising by nearly 17%, D-Wave Quantum (QBTS.US) rising by over 19%, and Rigetti Computing (RGTI.US) skyrocketing by 42%.

3 h ago

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