Today's Must Read
Strategic Buyouts Aid, Elevated Expense Hurt Mastercard (MA)
NVIDIA (NVDA) Gets a Boost From Gaming Business Recovery
Tuesday, January 14, 2020
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 Alibaba Group (BABA), Mastercard (MA), NVIDIA (NVDA) and others. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Alibaba’s shares have outperformed the Zacks Internet Commerce industry over the past year (+52.7% vs. +22.6%) and the Zacks analyst believes this performance momentum to continue given steady improvement in core commerce along with strong growth in metrics.
Further, Alibaba’s strengthening cloud business with its expanding customer base continues to drive its performance. Its New Retail strategy is also gaining significant momentum in the market. This is aiding growth in its Tmall Import, Hema fresh food grocery business and Intime Department Stores.
Additionally, the consolidation of Ele.me and Cainiao Network is acting as a tailwind. However, the company’s increasing investments, uncertain economy and macro headwinds in China are major concerns. Also, rising competition poses a risk.
Shares of Mastercard have gained +13.1% in the past three months against the Zacks Financial Transaction Services industry's rise of +10%. The Zacks analyst believes that the company's revenues have been gaining from higher switched transactions, increase in cross-border volume and gross dollar volume.
Numerous acquisitions made over the years have fueled its inorganic growth. The company is benefiting from shifts in payments, from physical to digital. Investment in technology has also kept the company at the forefront of the rapidly changing payments industry. Its solid capital position enables investment in business.
However, escalating costs might put pressure on margins. In order to gain customers and new business, Mastercard has been incurring high levels of costs under rebates and incentives, which remain a concern.
NVIDIA's shares have gained +50.6% over the past six months against the Zacks General Semiconductor industry's rise of +25.3%. The Zacks analyst believes that NVIDIA is benefiting from strong growth in GeForce desktop and notebook GPUs, which is boosting gaming revenues.
Solid momentum of its real-time ray tracing technology is also a positive. Increase in Hyperscale demand is a tailwind for Data Center business as well. Growing adoption in the inference market is an upside too. Further, the solid uptake of AI-based smart cockpit infotainment solutions is a boon.
Additionally, strength across mobile workstation products is aiding Professional Visualization revenues. However, in the near-term management expects strong sequential growth in Data Center to be offset by a seasonal decline in GeForce notebook GPUs and SoC modules for gaming platforms. Moreover, the U-China trade war remains a key concern.
Other noteworthy reports we are featuring today include Apple (AAPL), Lockheed Martin (LMT) and Tesla (TSLA).
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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>>>