| Written by Chris Markoch 
There’s a rotation away from technology stocks, but that message hasn’t dampened the optimism for retail investors in Palantir Technologies Inc. (NYSE: PLTR). Shares of the AI and big data company are up 67% in 2024 and 11% in the 30 days ending July 19, 2024. But the question is why? The answer could simply be a case of FOMO by institutions (more on that later). It could also be the realization that if interest rates come down, it will reduce concerns about corporate spending on AI going down. That would be bullish for PLTR stock, not because Palantir has a debt problem but because it greases the wheels of the global economy. Here are three other reasons to consider PLTR stock. Institutions May Be Playing Catch-Up The price movement in PLTR stock over the past few years is still primarily coming from a committed (some would say fanatical) base of retail investors. Only 45% of the stock’s float is owned by institutions. However, institutions mostly ignored the stock when it was trading under $10 per share just two years ago. I say mostly because, in the second quarter of 2023, institutions were heavy buyers of PLTR. That also corresponded with the stock moving sharply above $10 per share. However, institutions were mostly on the sidelines for this recent run-up, preferring other SaaS companies such as Snowflake Inc. (NYSE: SNOW). Now that PLTR has soared to over $28 per share, many of those same institutions say that PLTR stock is overvalued. It may be by many fundamental metrics. Future earnings reports will show if the company can grow into that valuation. But in many cases, institutions just hope to shake out some loose hands to grab shares at a better price. While they wait, they may find out that, much like NVIDIA Corporation (NASDAQ: NVDA), they have to fish where the fish are at a certain point. And with PLTR stock being relatively unaffected by the shift from tech, Palantir is a big fish in that pond. This Analyst Just Raised His Price Target for PLTR Stock Dan Ives of Wedbush is one of the biggest Palantir bulls. Earlier this year, he referred to the company as the Lionel Messi of AI. That’s a big claim, but Ives recently doubled down on his bullish outlook for PLTR stock. On July 18, Ives raised his bull case target price for Palantir to $50 from $35. Posting on X, Ives remarked, “With AI spending taking up more spending in IT budgets as more organizations learn how to properly implement this tech, we believe the Messi of AI Palantir is in a prime spot to continue expanding its pipeline as AIP is front and center...” Inclusion in the S&P 500 Would Cement PLTR Stock’s Bonafides In June, the S&P 500 Index opted not to include Palantir in its quarterly rotation. But the feeling then and now is that including Palantir is a matter of when not if. When that happens, many institutions that are still on the sidelines will jump in. When they do, if Ives is correct, and if institutions buy in, it’s go time. Investors may want to start a position before the company reports earnings on August 5.
Written by MarketBeat Staff
Stocks took a breather after rallying sharply to start the week. For now, this feels like a normal pullback that will leave room for stocks to move higher. But that could change as earnings season starts to ramp up. Investors will pay close attention to see if corporate guidance aligns with an expected rate cut in September. That guidance will also help investors decide if the long-awaited sector rotation is underway. And, if so, what sectors are likely to post the largest gains? Next week, investors will get the latest read on the Personal Consumption Expenditures (PCE) Index. This is the Federal Reserve’s preferred data point for inflation. If the number confirms that inflation is cooling, it will add further momentum for a rate cut in September. The takeaway for investors is to expect more volatility in the weeks and months ahead. And know that you can count on the MarketBeat team of analysts to point you to the opportunities that volatility can create. Here are some of our most popular articles from this week. Articles by Jea Yu Chinese stocks have been among the worst performers, including Alibaba Group Holding Ltd. (NYSE: BABA). The stock is down 75% from its all-time high but has shown signs of a turnaround in recent months. Jea Yu gives investors five reasons why it may be time to invest in BABA stock. Yu also wrote about the recent manufacturing agreement sending QuantumScape Co. (NYSE: QS) stock higher. The maker of solid-state batteries continues to move closer to initial production, and this landmark deal ensures there will be a market ready for its products. The rising cost of insurance is one of the latest impacts of inflation. That’s one reason Lemonade Inc. (NYSE: LMND) is worth a close look. It’s never easy to disrupt an industry with a business model as firmly entrenched as insurance. Still, Yu explains why Lemonade’s focus on artificial intelligence (AI) may cause investors to take notice, particularly if the company becomes profitable. Articles by Thomas Hughes Several MarketBeat analysts are monitoring sector rotation. In an article this week, Thomas Hughes explains sector rotation, why it’s happening now, and what stocks and sectors you should consider for your portfolio. Blue chip stocks are expected to rally as investors look for safety and growth outside technology stocks. That’s likely to make Johnson & Johnson (NYSE: JNJ) look attractive. After a strong quarter, analysts and investors are forecasting a significant upside for JNJ stock. And while some investors are looking for growth, many will seek out the value in dividend stocks. Hughes writes about three dividend aristocrats that offer investors a 5% yield to go along with a healthy outlook for growth. Articles by Sam Quirke While there is some noticeable rotation out of tech stocks, Sam Quirke wrote two articles this week reminding investors they can still find opportunities in the sector. For example, Apple Inc. (NASDAQ: AAPL) was written off by many investors at the beginning of the year. But the stock is rallying hard in the second quarter, and recent upgrades suggest more upside for AAPL stock. By contrast, Quirke notes that investors in Microsoft Corporation (NASDAQ: MSFT) have watched the stock drop in recent weeks. However, the stock was one of the best-performing stocks in the first half of the year, and all the catalysts that moved the stock high remain in place. This is why investors will watch the company’s upcoming earnings report for news that could make this an attractive dip. Articles by Chris Markoch NVIDIA Corporation (NASDAQ: NVDA) remains one of the most popular stocks in 2024. This week, Chris Markoch explains what’s causing the recent pullback in NVDA stock, why generative AI is a long-term bullish catalyst for the stock, and why lower interest rates could also negatively impact NVDA stock. Markoch also wrote about IDEAYA Biosciences Inc. (NASDAQ: IDYA), a mid-cap biotechnology stock that is a leader in the emerging field of precision medicine. The company’s stock was recently up 16% after reporting positive news in a recent Phase 2 clinical trial and what it could mean for IDYA stock moving forward. Articles by Ryan Hasson It's essential to watch for stocks that are likely to outperform in the coming sector rotation. But it’s also important to look for stocks that may underperform. This week, Ryan Hasson was eyeing four overbought stocks ready for a pullback and how investors should approach them. Hasson also wrote about the recent price action with Oracle Corp. (NYSE: ORCL) after its discussions with Elon Musk’s xAI startup fell through. This is a good reminder that investors will look for any reason to sell and why, when you zoom out, ORCL stock still has many bullish catalysts that should limit the sell-off. And the recent surge in equities was preceded by a surge in Bitcoin. That could make this a good time to look at crypto stocks, like the four crypto-related stocks that Hasson analyzed, as they have surged higher this week. Articles by Gabriel Osorio-Mazilli Gabriel Osorio-Mazilli also wrote about the possibility that exists in cryptocurrency stocks and analyzes four cryptocurrency stocks that could be ready to make a sharp move higher in the coming months as investors play the underlying strength in cryptocurrency. Investors may also notice that gold has been hitting record highs lately. That makes this a good time to consider gold stocks, particularly gold mining stocks, which require higher metal prices to make their drilling operations profitable. Osorio-Mazilli gives you three gold stocks to consider. Osorio-Mazilli also wrote about the opportunity in the cybersecurity stock Datadog Inc. (NASDAQ: DDOG). In a week ending with a reminder of cybersecurity's necessity and potential drawbacks, Osorio-Mazilli explains why analysts are bullish about DDOG stock. Articles by Leo Miller Airline stocks are among the first to report earnings. This week, investors heard from United Airlines Holdings Inc. (NASDAQ: UAL), and as Leo Miller writes, analysts liked most of what they heard, including that the airline reaffirmed its full-year guidance despite expectations for a 3% capacity decline in the coming quarter. In coming weeks, there’s been a sell-off in the chip sector. That, and remarks made by former President Trump, may help explain why shares of Taiwan Semiconductor Manufacturing Co. (NYSE: TSM) are flat despite the company delivering a double beat on revenue and earnings. You may wonder if you’ve missed the infrastructure-fueled run in industrial stocks such as Fastenal Co. (NASDAQ: FAST). Miller explains why analysts have mixed opinions on the company and how investors may want to trade FAST stock.
Written by Jeffrey Neal Johnson
Hims & Hers Health, Inc. (NYSE: HIMS) is a prominent player in the telehealth sector, which is part of the larger healthcare sector. The company has garnered significant attention from investors due to its remarkable rise in the stock market. Hims & Her’s strategy of providing accessible and affordable remote healthcare services has resonated with consumers, resulting in impressive growth and fueling investor enthusiasm. However, recently, Hims & Hers stock price has pulled back, leaving many investors wondering if this dip presents a buying opportunity or signals a potential shift in the company’s trajectory. Recent Stock Performance: A Rollercoaster Ride for Hims & Hers Hims & Hers stock has experienced a volatile year, showcasing investors' excitement and apprehension. The stock has surged by an impressive 130% year-to-date, driven by robust financial performance and the announcement of its new GLP-1 weight loss treatment offering. However, the stock has also experienced a recent pullback, creating uncertainty among investors. The Hims & Hers analyst community currently holds a "Moderate Buy" rating on HIMS, with an average price target of $19.07, representing a slight downside from its current price. However, with a highline price of $26, many analysts see room for potential price appreciation. This mixed sentiment reflects varying opinions on the company's prospects. Some analysts remain bullish on HIMS's long-term growth potential, fueled by its expanding service offerings and a growing customer base. Others express caution, citing potential challenges in the highly competitive telehealth market and regulatory risks associated with the company's new GLP-1 offering. Insider trading activity has also been mixed. Hims & Hers insider trading reports reveal instances of insider selling, raising questions about their confidence in the stock's future trajectory. However, other insiders have exercised stock options, indicating a positive view of the company's long-term value. These contrasting actions illustrate the mixed sentiment surrounding HIMS, leaving investors to weigh the various factors impacting its future prospects. Hims & Hers: A Story of Growth and Profitability Hims & Hers boasts a solid financial profile characterized by rapid revenue growth and a path toward sustained profitability. The company has already surpassed its expectations, demonstrating the strength and scalability of its asset-light business model. Revenue has grown at a staggering 100% annually since 2018, reaching $872 million for the fiscal year 2023. This growth has been driven by expanding product offerings, strategic marketing initiatives, and a growing customer base. Hims & Hers achieved its first EBITDA profitable quarter in Q1 2024, signaling a significant milestone in its journey towards long-term profitability. The company's ability to generate positive earnings while continuing to invest in growth demonstrates the inherent leverage in its business model. Management is targeting adjusted EBITDA margins of 20-30% in the long term, a testament to their confidence in the company's ability to scale efficiently. Hims & Hers' financial position is further supported by its strong balance sheet. The company ended Q1 2024 with $204 million in cash, cash equivalents, short-term investments, and no debt. This strong liquidity position gives the company the financial flexibility to pursue growth initiatives, invest in new technologies, and potentially make strategic acquisitions. Hims & Hers' Business Strategy: Personalization and Accessibility Hims & Hers has carved a unique niche in telehealth by offering a wide range of healthcare services catered to specific needs. The company began by addressing markets often overlooked by traditional medicine, such as dermatology and mental health. This strategic approach allowed them to build a loyal customer base seeking convenient and affordable solutions for sensitive conditions. Hims & Hers' success is rooted in its commitment to personalization and accessibility. The company's platform offers diverse products and services catering to individual needs and preferences. Its recent introduction of personalized subscriptions has been met with positive feedback, with over 35% of subscribers now opting for this customized approach. The company's foray into weight loss treatments, including the highly sought-after GLP-1 injections, further exemplifies its ability to adapt to market trends and capitalize on emerging opportunities. While GLP-1 is not the sole driver of Hims & Hers' investment thesis, it showcases the company's agility in integrating popular medications into its platform to capitalize on existing demand and meet evolving customer needs. Hims & Hers' business model is designed for scalability. The company leverages technology to streamline operations and reach a broader audience. The company's network of independent contractor doctors and partnerships with established healthcare providers, such as Labcorp (NYSE: LH) and Carbon Health, allow it to expand its reach without incurring significant capital expenditures. This asset-light model fosters operational efficiency and enables the company to reinvest its profits into growth initiatives. A Competitive Landscape for HIMS and Regulatory Headwinds Despite its impressive growth and robust financial health, Hims & Hers faces inherent risks associated with operating in the healthcare industry. The telehealth market is becoming increasingly competitive, with traditional healthcare giants like UnitedHealth Group (NYSE: UNH) and Elevance Health (NYSE: ELV) developing their own digital platforms. This influx of competition could pressure pricing and make it more difficult for Hims & Hers to attract new customers. While the company has a first-mover advantage and strong brand recognition, it lacks a solid competitive "moat," making it vulnerable to market share erosion. The healthcare industry is highly regulated, leaving companies like Hims & Hers susceptible to lawsuits and regulatory scrutiny. A public scandal related to medical errors or data privacy breaches could severely damage the company's reputation and negatively impact its growth prospects. Hims & Hers' rapid growth also presents challenges. Managing a rapidly expanding organization can strain resources, impacting operational efficiency and customer satisfaction. Investing in Hims & Hers: Balancing Risk and Reward Hims & Hers Health, Inc. presents a compelling investment opportunity for investors seeking exposure to the growing telehealth market. The company's strong financial performance, innovative business model, and ambitious growth strategy suggest the potential for substantial long-term returns. However, investors must also consider the inherent risks associated with the company, including competition, regulatory uncertainty, and operational challenges. A balanced assessment of these factors is crucial for making informed investment decisions. While the recent pullback in HIMS stock presents an opportunity for investors to acquire shares at a potentially discounted price, a thorough understanding of the company's strengths, weaknesses, and future outlook is essential for successful long-term investing. Look 2023 kind of sucked from a trading standpoint…
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