Today's Must Read
Digital Lending Platform Aids Goldman (GS), High Costs Ail
Applied Materials (AMAT) Rides on Foundry & Logic Spending
Tuesday, May 25, 2021
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Apple Inc. (AAPL), Goldman Sachs (GS), and Applied Materials (AMAT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Apple shares have lagged the market this year, with the stock down -4.4% this year vs. the +12.4% gain for the S&P 500 index. Driving this underperformance is the sentiment shift away from the large-cap Tech stocks and rotation into cyclical and 'value'-oriented stocks. That said, Apple’s second-quarter fiscal 2021 results did reflect continued momentum in the Services segment, driven by a robust performance of App Store, Cloud Services, Music, advertising and AppleCare.
Moreover, iPad, Mac and Wearables contributed strongly to the quarterly results. Further, iPhone sales increased due to strong demand for iPhone 12 devices. China and Japan iPhone sales increased significantly.
The Zacks analyst believes that Apple’s near-term prospects are bright, driven by new iPhones that support 5G, revamped iPad and Mac line-up of devices, health-focused Apple Watch and robust growth in the Services business. However, increasing scrutiny and legal woes over App Store is a headwind.
Shares of Goldman Sachs have gained +55.7% in the last six months against the Zacks Financial - Investment Bank industry’s gain of +45.4%. In fact, the company has an impressive earnings surprise history, having outpaced the Zacks Consensus Estimate in each the trailing four quarters.
The Zacks analyst believes that the company’s first-quarter 2021 results benefited from robust capital markets performance and reserve release. Goldman’s solid position in announced and completed M&As across the world will keep strengthening the business. Also, business diversification, including digital platforms, helps sustain growth. Efforts to expand consumer lending business are encouraging. Steady capital deployment activities remain a tailwind.
With a strong liquidity position, it remains less exposed to credit risk in case of any economic downturn. However, legal issues, high dependence on overseas revenues and volatile client-activity might impede top-line growth.
Shares of Applied Materials have outperformed the Zacks Semiconductor Equipment - Wafer Fabrication industry in the last one-year period (+144.0% vs. +119.0%). The Zacks analyst believes that Applied Materials is driven by strong momentum across Semiconductor Systems and Applied Global Services. Further, solid demand for silicon in several applications across various markets remains a tailwind. Additionally, growing momentum among long-term service agreements is contributing well.
Furthermore, increased customer spending in foundry and logic on the back of rising need for specialty nodes in automotive, power, 5G rollout, IoT, communications and image sensor markets, is a major positive. Also, strong momentum in conductor etches is benefiting the company’s position in DRAM and NAND. However, market uncertainties continue to persist. Further, mounting expenses are concerns. Also, rising competition poses risk to the company’s market position.
Other noteworthy reports we are featuring today include Snap Inc. (SNAP), Exelon Corporation (EXC) and The Travelers Companies, Inc. (TRV).
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
Director of Research
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>