Investors are desperately looking for signs of a market bottom after going through massive volatility and losses. 3Fourteen Research’s Warren Pies said in a latest program on CNBC that we are getting “close” to a market bottom based on his technical analysis. The analyst talked about key indicators he’s looking for:
“I do think that the White House is trying to deescalate the situation. One of the markers we’ve seen is that Peter Navarro hasn’t been on TV since April 13th, and that’s corresponding with this equity rally. Setting that aside, though, I think that a bottom, a confirmed bottom, has two components. You need to see washed out sentiment and positioning. We measured that in a number of ways: we measured it in inverse ETFs for retail, we measured it for vault targeting for institutions, and CTAs for trend followers. Across all those metrics, sentiment is depressed. That’s phase one of a bottom. Then, you look for technical confirmation. Philosophically, we’re always going to be late because of that ordering.”
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10. Lattice Semiconductor Corp (NASDAQ:LSCC)
Number of Hedge Funds Investors: 32
Lattice Semiconductor (NASDAQ:LSCC) recently received a Buy rating from Loop Capital, which cited the company’s potential to gain market share.
Loop sees strong growth ahead for Lattice Semiconductor Corp (NASDAQ:LSCC) as it expands in the field programmable gate array (FPGA) space. The firm projects compound annual growth in the high teens, driven by FPGAs gaining traction as cheaper, more flexible alternatives to application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs).
The firm set an $85 price target on the stock.
Lattice Semiconductor Corp (NASDAQ:LSCC) makes FPGAs and related chips used across sectors such as communications, computing, automotive, and industrial.
“We see three main drivers for 70%-plus and 40%-plus gross and operating margins, respectively, for LSCC (vs. 67%/25% in FY24),” said Loop analyst Gary Mobley in a note. “First, mix tailwinds will help (e.g., new product mix, software, end-market mix, etc.). Second, we see relatively good pricing power in the FPGA market, limited competition and a tailwind from newer products like Avant (as much as 20.0x ASP boost). Last, the move to lower cost regions like India & China for R&D should continue to act as a structural tailwind to LSCC’s R&D expenses.”
Artisan Small Cap Fund stated the following regarding Lattice Semiconductor Corporation (NASDAQ:LSCC) in its Q3 2024 investor letter:
“Among our top detractors were iRhythm, e.l.f. Beauty and Lattice Semiconductor Corporation (NASDAQ:LSCC). Lattice shares struggled due to cyclical pressures, most notably within its industrial end market, and a weak environment within the telecom business. We believe some of these ongoing headwinds are set to ease, but it may take longer than previously expected. Lattice expects a return to growth at the end of 2024 or early 2025, partly fueled by a steady flow of new product launches, which continues to drive market share gains. We remain patient.”
9. HubSpot Inc (NYSE:HUBS)
Number of Hedge Funds Investors: 63
Doug Clinton, Intelligent Alpha founder, said in a latest program on CNBC that just like the “vibe coding” trend is creating its effects in the tech industry, “vibe marketing” could help HubSpot Inc (NYSE:HUBS) in the coming months:
“You look at a HubSpot, you know, I think that that’s a name where they are obviously building AI tools for their users. We’ve had this phenomena of vibe coding in the software side for developers, and I think this idea of vibe marketing where people who maybe they’re not designers, they’re not expert creatives, they can go and use some of these AI tools and create really compelling ads. I mean, they look professional. I think companies like HubSpot could benefit from that. We might start to see some inflection in their numbers in the back half of the year.”
TimesSquare Capital Management U.S. Focus Growth Strategy stated the following regarding HubSpot, Inc. (NYSE:HUBS) in its Q4 2024 investor letter:
“Among the wide variety of Information Technology companies, we prefer critical system providers, specialized component designers, systems that improve productivity or efficiency for their clients, and others that are growing their shares of corporate IT budgets. Another addition to the sector was HubSpot, Inc. (NYSE:HUBS), a cloud-based customer relationship management platform provider. Its execution has been stellar, with a best-in-class software product driven by a robust innovation engine, a unified underlying data architecture platform, and a focus on the small-to-mid business market where we see high potential for productivity improvements from Generative AI innovation, They subsequently reported a strong third quarter earnings report was highlighted by billings growth and the new business backlog has accelerated. HubSpot added 10,000 net new customers in the quarter.”
8. Chipotle Mexican Grill Inc (NYSE:CMG)
Number of Hedge Funds Investors: 69
Investopedia’s Caleb Silver said in a latest program on Schwab Network that Chipotle Mexican Grill Inc (NYSE:CMG) is expected to be impacted by a decline in consumer spending and tariffs.
“This is right in the middle of everything. This is right in the middle of tariffs. This is right in the middle of consumer spending and sentiment, right in the middle of discretionary spending for consumers. Because when you think about it, a burrito bowl or a burrito — they’re 17, 18 bucks. There’s a lot cheaper options, and I think consumers are going to be looking for those. Plus the pressure from tariffs — we got avocado tariffs probably coming tomorrow. Those are going to hit them big time. And they’re still coming out of that sort of skimpy portion scandal last summer that cost them some reputational damage.”
However, Reuters reported that avocados are among the Mexican items that the U.S. will continue to be able to import tariff-free.
ClearBridge Growth Strategy stated the following regarding Chipotle Mexican Grill, Inc. (NYSE:CMG) in its Q4 2024 investor letter:
“We also initiated a position in fast casual restaurant chain Chipotle Mexican Grill, Inc. (NYSE:CMG). The recent pullback in shares related to a moderation in industry-wide restaurant sales and CEO Brian Niccol’s August departure created an attractive entry point into a company with industry-leading unit economics in a still underpenetrated market. Chipotle plans to double its store footprint over time while executing initiatives to increase volume growth through technology enhancements, reduced mobile order friction and higher production during peak hours. Better throughput, technological integration and improved mix should help to drive continued margin expansion. Chipotle further diversifies the portfolio, adding to consumer discretionary where we have historically had less exposure.”
7. Tesla Inc (NASDAQ:TSLA)
Number of Hedge Funds Investors: 99
Mark Fields, former Ford CEO, said in a latest program on CNBC that there was a lot of “noise” for Tesla Inc (NASDAQ:TSLA) when it comes to the first-quarter delivery numbers amid the company’s refresh of Model Y and “reputational” issues. The executive believes the second-quarter delivery numbers will show an accurate picture of the company’s business health:
“There was a lot of noise in the quarter for Tesla, right? Because, you know, their sales were down 13% year-over-year. They’ve been kind of losing share, at least on registration data, in all their major markets—whether it’s China, Europe, or the U.S. I think in the quarter, you had a couple of things going on. One is they were refreshing their Model Y, which is their bestselling vehicle, so they had a lot of changeover in their four plants around the globe. That took out production. And then there’s the other piece, which is, you know, how much reputational damage has Tesla incurred because of Musk’s involvement with the Trump administration?
So I think there was a lot of noise in there. I think the second quarter is going to be very telling because you take the noise out of the production interruption that they had in the first quarter, and you really get to see what the true demand is for Tesla—with Musk involved with the Trump administration and the impact on them.”
Tesla’s EV sales are falling all over the world as the company faces challenges from competitors. Even if Elon Musk increases his focus to fix the company’s problems, it would take a lot of effort to come out of the demand crisis. For example, in California, the largest U.S. market for electric vehicle adoption and sales, Tesla sales fell about 12% year over year in 2024, causing its market share to drop from 60.1% in 2023 to 52.5% in 2024. Was it because Californians are buying fewer EVs? No. Californians purchased more than 2 million electric cars during the year, almost double when compared to the past two years.
JDP Capital Management stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q4 2024 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) is new core position that I wrote about in 2024 Half Year Letter. The stock was up 115% in 2024. We benefited from the June 2024 timing of our purchase, buying after the stock had declined about 30% in the first part of the year.
We repurchased TSLA at a time when the market had [again] become overly bearish based on slowing vehicle orders despite the company having just achieved a breakthrough in Full Self Driving (FSD v12). If you haven’t had a chance to experience the most recent Full Self Driving software (FSD 13.3) I suggest you try it for yourself. If you’ve had a Tesla for a while, you know that the trajectory of FSD improvement has been nothing less than astounding.
It has become clearer to me that Tesla’s leadership position in the infrastructure layer underpinning mega-trends in robotics, smart vehicles and battery storage will unlock earnings growth that we can ride for years. Similar to AWS or the iPhone, Full-Self-Driving and Optimus will enable new business models to be built across a wide range of industries over time…” (Click here to read the full text)
6. Apple Inc (NASDAQ:AAPL)
Number of Hedge Funds Investors: 158
Jim Cramer in a latest program on CNBC talked about a bearish report on Apple Inc (NASDAQ:AAPL), mentioning a decline in its sell-throughs.
“More negative stuff about Apple: UBS is talking about sell-through drops of 1% year-over-year in February, which would be very negative. And you know what? I just read these things and it just kind of makes my eyes glaze over, but every time that they happen, they happen after a day where Apple goes up and then Apple gives back its gains, and that’s what you’re seeing today. I don’t think anyone thinks Apple’s having great sell-through.”
Apple Inc (NASDAQ:AAPL) is desperately in need of new catalysts. The company’s revenue in China fell 8% in fiscal year 2024, following a 2% decline the previous year. The Chinese market accounts for about 15% of Apple’s total revenue, so this downtrend cannot be ignored.
Investors had hopes from the Wearables, Home, and Accessories segment, but so far its performance has been weak. Vision Pro faces tough competition from Meta’s $500 Quest and the more affordable Quest 3S, making it hard to justify its $3,500 price tag. The failure of Apple’s HomePod, unable to compete with Amazon’s and Google’s lower-priced offerings, further highlights the challenges in this market.
Apple’s iPhone 16 has not shown promising growth prospects yet and investors are still in a wait-and-see mode on the AI platform.
Columbia Seligman Global Technology Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter:
“The fund maintained a position in Apple Inc. (NASDAQ:AAPL) throughout the quarter through the release of the company’s new iPhone 16 in September. Company leaders were excited about the release of the new model, as this is the first model that will feature enhanced AI capabilities through the Apple Intelligence features. Sales for the first few weeks in October and November trailed behind year over year sales from the iPhone 15, as availability of Apple Intelligence was not compatible with all iPhone models. Apple announced a partnership with OpenAI that has allowed the integration of ChatGPT into the Apple ecosystem, separate from the core Apple Intelligence features. This partnership highlights continued progress from Apple to introduce AI capabilities into its products and we expect the iPhone 17 to have even more expansive AI capabilities, increasing potential demand for the new model that is on track to be released in 2025.”
5. Alphabet Inc (NASDAQ:GOOG)
Number of Hedge Funds Investors: 160
Ben Reitzes, Melius Research head of technology research, said in a latest interview with CNBC that Alphabet Inc (NASDAQ:GOOG) search business is under threat from other companies and it “does not matter” how many models the company releases to keep up with the competition. The analyst brought up Kodak to highlight a possible outcome for Google.
“I mean, it’s confusing. It’s very cluttered. Make a bet. There—I don’t know one other than analysts and investors who can name every model and every product that Google’s experimenting with.What has happened time and again in this market is there’s disruptors who make a bet—this is the way things are going to go—and they move faster. It’s actually not always the best product. It’s not always the best model. Actually, the best model belongs to Google. It’s called Gemini 2.5 Pro. It is the best. We said it in our note. You know, Kodak had the best digital cameras too. Every six months, they’d come out with one that topped Canon. It didn’t matter. It’s—you got to make a bet and disrupt yourself.”
Burke Wealth Management stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q4 2024 investor letter:
Alphabet: We parted ways with long-term holding Alphabet during the fourth quarter. We’ve owned Alphabet since the inception of the Focused Growth strategy so obviously, the company has many positive attributes that we admire. That remains the case. We have long contended that Google search is the best business in the world. However, developments over the past couple of years on the competitive front (generative AI search) and the regulatory/legal front have put the sustainability of Google’s search monopoly at legitimate risk for the first time since Microsoft launched Bing in 2009. We cut our weighting in Google in half last year as we wanted to take some time to better assess the threat of generative AI driven search to its business model. To be fair, this emerging threat has been something more akin to a gathering storm than a tornado. Capital continues to flow into the space both from start-ups and the Microsoft/Open AI collaboration. Thus far, this has not resulted in a material erosion of market share but it is certainly something requiring continued monitoring….” (Click here to read the full text)
