Today's Must Read
Strong GPU Adoption in Gaming, Datacenter Aids NVIDIA (NVDA)
Revlimid, Eliquis Boost Bristol-Myers (BMY), Opdivo Weakens
Tuesday, July 07, 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), NVIDIA (NVDA) and Bristol Myers Squibb (BMY). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Alibaba shares have modestly lagged the Zacks Internet Commerce industry over the past year (+43.8% vs. +52.7%), but have otherwise been stellar performers. The Zacks analyst believes that Alibaba Group is driven by a steady improvement in core commerce and strong cloud business. The company continues to benefit from strong growth in metrics.
Further, Alibaba’s strengthening cloud business with its expanding customer base continues to drive its performance. The company's New Retail strategy is also gaining momentum. This is aiding growth in Tmall Import, Hema fresh food grocery business and Intime Department Stores.
However, higher costs associated with new initiatives remain a major concern. Also, COVID-19 related economic uncertainties and macro headwinds in China are major concerns. In addition, rising competition from e-commerce players like Amazon poses a risk.
Shares of NVIDIA have gained +67% over the past six months against the Zacks General Semiconductor industry’s rise of +18%. The Zacks analyst believes that NVIDIA is benefiting from the coronavirus-induced work from home and learn-at-home wave.
The company is also benefiting from strong growth in GeForce desktop and notebook GPUs, which is boosting gaming revenues. Moreover, a surge in Hyperscale demand remains a tailwind for the company’s Data Center business. The company expanded NVIDIA GeForce NOW in the last quarter, which is expected to drive user base.
Further, the solid uptake of AI-based smart cockpit infotainment solutions is a boon. Additionally, its latest collaboration with Mercedes-Benz is expected to further strengthen NVIDIA’s presence in the autonomous vehicles and other automotive electronics space. However, in the near term, management expects a $100-million negative impact of the coronavirus menace on revenues. Moreover, the U.S.-China trade war remains a key concern.
Bristol Myers Squibb’s shares have gained +4% over the past three months against the Zacks Large Cap Pharmaceuticals industry’s rise of +17.4%. The Zacks analyst believes that Bristol-Myers’ blockbuster immuno-oncology drug, Opdivo, and blood thinner drug, Eliquis, will drive growth for the company.
Eliquis is the leading oral anti-coagulant drug and the company continues to witness growth in both Eliquis brand and the market. The label expansion of Opdivo for first-line NSCLC should boost growth. The addition of sales from Celgene’s drugs (acquired in November 2019) has boosted growth prospects. In particular, the addition of Revlimid has strengthened the oncology portfolio.
However, the company trimmed its revenue forecast with the first-quarter results. Opdivo’s performance was dismal as it faces stiff competition from Keytruda and Tecentriq. Moreover, concerns will rise once Revlimid loses patent protection. Pipeline setbacks too weighed on shares.
Other noteworthy reports we are featuring today include Johnson & Johnson (JNJ), PetroChina (PTR) and S&P Global (SPGI).
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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>>>