In this article, we will take a look at the 10 stocks making headlines on Tuesday.
Famous companies from the technology and industrial sectors, including Microsoft Corporation (NASDAQ:MSFT), ServiceNow, Inc. (NYSE:NOW) and Delta Air Lines, Inc. (NYSE:DAL), are trending today.
Microsoft shares fell nearly three percent this morning after receiving a price-target cut from Morgan Stanley. On the other hand, ServiceNow stock plummeted over 10 percent after its CEO Bill McDermott warned that macro challenges could impact IT spending, hurting the growth of software firms.
Photo by AlphaTradeZone
In addition, electric vehicle maker Canoo Inc. (NASDAQ:GOEV) and energy company Occidental Petroleum Corporation (NYSE:OXY) were also spotted making big moves this morning.
We will discuss the reasons behind the movement of these stocks in the remaining article.
10. GameStop Corp. (NYSE:GME)
Number of Hedge Fund Holders: 18
Shares of GameStop Corp. (NYSE:GME) rose over six percent this morning after the company launched its much-awaited online marketplace for nonfungible tokens (NFTs). The latest development is a part of its efforts to benefit from the increasing adoption of digital currencies and blockchain technology.
GameStop Corp. said the platform would enable users to trade NFTs and link their digital asset wallets. In addition, they will also be able to create their own NFTs. Moving forwards, the company plans to add more features, such as Web3 gaming, to the platform in the future.
Separately, investment management firm Bronte Capital mentioned GameStop Corp. in its first-quarter 2022 investor letter, stating:
“Gamestop is a retailer of video games on DVD ROM trying hard (and maybe with some success) to reinvent itself as an alternative computer game distributor. The company raised enough money that bankruptcy is not an immediately likely outcome. (GME would have gone bankrupt except for the willingness of largely retail investors to provide them with much more cash.)
Both have bad financial results. Gamestop’s last financial results were terrible. And both stocks more than doubled very rapidly in March from market caps that were absurd to market caps that are more absurd. We are of course completely aware that they can double again and again after that. Their valuations are absurd but if you double the price they are not twice as absurd. They are just similarly disconnected from reality.
The reason we want to talk about them is that it is indicative of what is going on. Gamestop, the most meme of all stocks, announced a possible stock split and the stock, after market that day, traded up 17 percent. We could joke that every child knows that cutting a pizza into more slices yields more pizza. But in this market, not accepting that stock splits add value is a recipe for losing money.”
9. Canoo Inc. (NASDAQ:GOEV)
Number of Hedge Fund Holders: 19
Shares of Canoo Inc. skyrocketed over 80 percent in the pre-market trading session today following the news that Walmart Inc has inked a deal to purchase 4,500 electric vehicles (EVs) from Canoo.
The deal is a part of Walmart’s broader policy to sharply reduce its carbon footprint. Some reports indicated that the retail giant may buy an additional 10,000 EVs from Canoo Inc. in future.
Canoo Inc. will also deliver its Lifestyle Delivery Vehicle (LDV) as a part of the latest agreement. The Arkansas-based EV startup is expected to commence the production of its LDVs by the end of this year.
8. The Gap, Inc. (NYSE:GPS)
Number of Hedge Fund Holders: 23
Shares of The Gap, Inc. (NYSE:GPS) fell over six percent this morning following the news that CEO Sonia Syngal will be leaving the company. The Gap, Inc. didn’t provided the reason for Syngal’s exit.
The news came at a time when The Gap, Inc. is struggling to revive its sales amid record inflation and dwindling consumer confidence. Shares of The Gap, Inc. have already plummeted about 55 percent so far in 2022.
Meanwhile, the San Francisco-based clothing retailer also warned that its second-quarter margins will remain under pressure due to rising costs.
7. American Airlines Group Inc. (NASDAQ:AAL)
Number of Hedge Fund Holders: 28
Shares of American Airlines Group Inc. (NASDAQ:AAL) jumped over 10 percent on Tuesday morning after the company said that it is expecting a pre-tax quarterly income for the first time since the coronavirus outbreak in 2020.
American Airlines Group Inc. seems to be benefitting from pent up travel demand. It anticipates a pre-tax income of $585 million for the second quarter. Moreover, the company expects to generate revenue of $13.39 billion for the same period, representing a surge of 12 percent over the second quarter of 2019. American Airlines Group Inc. made these disclosures in a Form 8-K filing.
Like American Airlines Group Inc., Microsoft Corporation, ServiceNow, Inc. and Delta Air Lines, Inc. were also seen making notable moves today.
6. The Boeing Company (NYSE:BA)
Number of Hedge Fund Holders: 52
Shares of The Boeing Company (NYSE:BA) rose over six percent in the mid-day trading Tuesday after the aerospace giant reported that it delivered 216 airplanes in the first half of 2022, representing a jump of 38 percent over the first half of 2021.
The Boeing Company delivered 51 airplanes in June to reach that total. If we look at the new business, The Boeing Company secured 50 airplane orders during the last month, including 49 Boeing 737 MAX.
5. Delta Air Lines, Inc. (NYSE:DAL)
Number of Hedge Fund Holders: 55
Shares of Delta Air Lines, Inc. are trading higher today, just ahead of the company’s second-quarter results. The Georgia-based airline is scheduled to post its Q2 financial report before the opening bell on Wednesday, July 13, 2022.
Delta Air Lines, Inc. expects its quarterly revenue to be at par with the pre-pandemic levels despite higher fuel costs. Moreover, it expects operating margins in the range of 13 – 14 percent. On the other hand, analysts expect Delta Air Lines, Inc. to report earnings of $1.64 per share on revenue of $13.24 billion for the second quarter.
Earlier this year, investment management firm Miller Value Partners praised Delta Air Lines, Inc. in its fourth-quarter 2021 investor letter. The firm said:
“We’ve healed greatly from the worst days of the pandemic, and we expect that to continue going forward. We see the greatest disconnects between current market expectations and 18-months-out fundamentals in names like Delta Airlines (DAL).
Delta is a quality airline with shareholder-friendly management. It was the only one not to issue equity during the pandemic. It was also the only profitable airline in the second half of 2021. It generated positive operating cash flow despite business and international travel weakness. When earnings finally normalize, which the company doesn’t expect until 2024, it should earn more than $7/share. After bouncing significantly off the lows, DAL currently trades at $41.99 or less than 6x those earnings.”
4. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 62
Shares of PepsiCo, Inc. (NASDAQ:PEP) turned green in the pre-market trading session today after the New York-based snack and beverage giant beat profit and sales expectations for its fiscal second quarter.
PepsiCo, Inc. reported adjusted earnings of $1.86 per share, topping estimates of $1.74 per share. In addition, revenue for the quarter rose 5.2 percent versus last year to $20.23 billion, beating the consensus of $19.51 billion.
Separately, investment management firm ClearBridge Investments talked about PepsiCo, Inc. in its fourth-quarter 2021 investor letter, stating:
“The pandemic created opportunities for us to be more aggressive in a variety of areas of the market. We were opportunistic throughout the year. After a strong year for equities, we sought to bolster more defensive areas of the portfolio and added to PepsiCo, increasing our exposure to a high-quality and stable name.”
3. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 67
Shares of Occidental Petroleum Corporation fell nearly three percent in the pre-market trading session today after Goldman Sachs downgraded the oil and gas company from “Buy” to “Neutral.”
Goldman Sachs analyst Neil Mehta thinks Occidental stock’s valuation is less attractive compared to other energy companies. He pointed towards a sharp surge in Occidental shares on a year-to-date basis.
Nevertheless, Occidental Petroleum Corporation remains a favorite pick of Warren Buffett’s Berkshire Hathaway. The firm recently acquired 12 million shares of Occidental Petroleum, bringing its total holdings in the company to 175.4 million shares.
Berkshire Hathaway is now the biggest shareholder of Occidental Petroleum Corporation, with an 18.7 percent stake.
2. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 90
Shares of ServiceNow, Inc. plummeted over 12 percent this morning. The drop came after CEO Bill McDermott mentioned factors like the strong dollar, increasing interest rates, elevated fuel costs and war in Europe and how they could impact the demand for the company’s services.
McDermott believes that customers would likely avoid costly digital transformation and rather spend on areas offering faster returns due to the existing macro headwinds. Referring to McDermott’s comments, Stifel analyst Brad Reback said ServiceNow, Inc. might lower its outlook when it posts its financial results later this month.
Reback expects software companies, including ServiceNow, Inc., to lower their expectations in the coming weeks.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 259
Shares of Microsoft Corporation fell nearly three percent in mid-day trading Tuesday after Morgan Stanley lowered its price target for the software maker giant from $372 per share to $354 per share.
Morgan Stanley analyst Keith Weiss cautioned that macroeconomic factors could impact the growth rate of Microsoft Corporation in the coming quarters. He also referred to declining IT spending and weakening PC demand. Weiss thinks that softness in certain businesses of Microsoft Corporation could reduce its fiscal 2023 profit by $1 per share.
Separately, Microsoft Corporation appeared in the first-quarter 2021 investor letter of investment management firm Carillon Tower Advisers. The letter stated:
“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. Microsoft (NASDAQ:MSFT) reported positive results driven by personal computing strength, but analysts were especially positive on its growth outlook for its Azure cloud-computing services.”
You can also take a peek at 10 Best Tech Stocks to Buy According to Billionaire Ken Griffin and David Abrams’ 2022 Portfolio: Top 10 Stock Picks.
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This article is originally published at Insider Monkey.
