AMD stock has fallen off slightly from its 52-week high, but investors should wait for shares to lose a bit more steam before buying in. Payments platform Square has purchased $50 million in bitcoin, buying a total of 4,709 bitcoins, which, according to the company, represents about 1 percent of its total assets as of the end of the second quarter. Alibaba, given its broad scope, could act in the role once occupied by fixed income when it was an effective offset to equity weakness SRNE stock hasn’t been blown out of proportion like many of the other coronavirus biotech stocks, and that makes it an attractive option. “I feel like the president has created a false expectation,” even though Regeneron’s antibody cocktail is “pretty good,” CNBC’s Jim Cramer said. News that Tesla is looking to expand its 3D printing operations has 3D Systems and DDD stock rallying higher this week.
At this point, hyping up Advanced Micro Devices (NASDAQ:AMD) stock seems pointless.
Many market commenters and analysts genuinely doubt whether there is an end in sight to the chipmaker’s growth story. Fortunately, for those long on AMD stock, it doesn’t look like sales are slowing down in the slightest.
Short interest for the stock is also at an all-time low, and even the most ardent bears have surrendered.
The only thing working against the stock is the share price. AMD stock still trades at 88x times forward price-earnings ratio, a very rich valuation despite a recent pullback that made shares somewhat more attractive.
Ultimately, it’s a case of when is the best time to buy into the stock since fundamental strength will never be a problem with AMD.
A recent dip into the $70s must be leaving investors salivating, but with the stock still trading more or less in line with consensus price targets, I would wait for shares to shed some more value before adding more to your portfolio. Regardless, you can’t go wrong with the company, considering its history and solid track record of returns.
Work-from-home stocks recently lost a bit of steam after an extended bull run from mid-March onwards. AMD was among the casualties, but the good thing is the sell-off prompted fresh interest in the semiconductor company. The negative market sentiment had little to do with AMD, which is going strong despite bearish calls of an eventual slowdown in sales.
Instead, it’s because of three important factors.
First, Republicans and Democrats struggle to come to terms with the provisions in the next fiscal stimulus bill. Markets hate uncertainty, and the sooner the bill is passed, the better.
Second, the Trump administration banned all TikTok and WeChat downloads in the U.S., while Oracle (NYSE:ORCL) makes a play for TikTok parent ByteDance. U.S.-China tensions tend to have an anemic effect on the markets, and they certainly did so here.
Last, we are seeing Covid-19 infections spike again, especially in Europe. Considering we are still a few months shy of a commercial vaccine, this is pretty bad news since it could lead to fresh lockdown restrictions and undo a lot of the progress made since reopenings.
While external factors have certainly helped push the stock down, AMD itself is progressing at a very healthy clip. Data from the first half of September shows Ryzen 3000-series SKUs are still selling out, despite the imminent launch of its next-gen Zen 3-based CPUs.
You would have thought that the demand for these chips would have reduced. On the contrary, it seems that the 3000-series SKUs will continue to ship along with the 4000-series. The demand is driven by work-from-home requirements, which should keep inventory moving for a few more quarters, at least.
However, even beyond that, new console sales, data center growth, and the soon-to-be-released chips will continue to increase AMD’s market share compared to Intel (NASDAQ:INTC).
This fall will see the renewal of one of the oldest rivalries in tech – Sony’s (NYSE:SNE) PlayStation versus Microsoft’s (NASDAQ:MSFT) Xbox. Sony’s PlayStation 5 will launch on Nov. 12 ahead of the 2020 holiday season. Meanwhile, Microsoft will release the newest version of the Xbox on Nov. 10.
AMD doesn’t have any horse in this race, as it supplies chips to both the companies. The only thing AMD will be hoping for is that Xbox manages to sell more units this go-around.
Since 2014, the company has not managed to sell over 10 million units. And in 2019, there were just 5 million units sold. Microsoft is hoping to boost sales through offering financing plans at $25 and $35 per month for the Xbox Series S and Xbox Series X, which will respectively retail for $299 and $499.
Regardless, the launch of the two consoles will provide a significant tailwind for AMD moving forward. And while work-from-home trends could change moving forward, console sales will remain strong.
The last month wasn’t a good one for AMD bears. Short interest dipped to a 10-year low as market sentiment once again turned bullish. Meanwhile, Intel and Nvidia (NASDAQ:NVDA) are seeing a build-up of short interest. So, the decrease in short interest is not a sector-wide trend; instead, it’s down to AMD’s growth prospects.
Usually, a stock that is up almost 73% year to date will have a lot of short interest since people would be betting on some degree of the eventual market correction. However, that doesn’t look like the case here.
Source: Chart by Faizan Farooque
AMD stock is an excellent investment and has been one for many years. There is nothing to suggest the company is in danger of falling by the wayside anytime soon. But as I said, shares are a bit too expensive for my taste at the moment.
That’s why I would wait for them to cool off a bit before adding more stock to my portfolio.
On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. He has several years of experience analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.
Square buys $50 million in bitcoin as part of larger investment in cryptocurrency
Payments platform Square has purchased $50 million in bitcoin, part of its larger investment in cryptocurrency, the company announced on Thursday. Square bought a total of 4,709 bitcoins, which the company says represents about 1 percent of its total assets as of the end of the second quarter.
Square said it was making the purchase because it believes “bitcoin has the potential to be a more ubiquitous currency in the future,” calling cryptocurrency “an instrument of economic empowerment” that “provides a way for the world to participate in a global monetary system.” Square has accepted bitcoin as a form of payment since 2014.
Jack Dorsey, CEO of Twitter and Square, has long been a proponent of bitcoin, saying in 2018 that he believes it will eventually become the world’s single currency within the next decade. Dorsey, who also owns an undisclosed amount of bitcoin personally, said during an earnings call in 2018 that “Bitcoin, for us, is not stopping at buying and selling. We do believe that this is a transformational technology for our industry and we want to learn as quickly as possible.”
Square added bitcoin trading to its Cash app in 2018, and last year, it formed Square Crypto, an independent team that contributes to bitcoin open-source work. Last month, Square launched the nonprofit Cryptocurrency Open Patent Alliance, aimed at keeping the open-source nature of cryptocurrency alive by pooling patents in a shared library to “defend against patent aggressors.”
Bitcoin’s price is around $10,775 at present.
In May, Square reported its bitcoin revenue for the first quarter was $306 million, on total revenue of $1.38 billion. That’s an increase of 367 percent from the year-ago quarter, the company reported, adding that the rise was “due to growth in the number of active bitcoin customers, as well as growth in customer demand.”
Author: Kim Lyons
Worried About the U.S. Stock Market? Buy Alibaba Options.
China might be the best hedge for U.S. stocks.
Key Chinese indexes and stocks are outperforming their U.S. counterparts, and investor sentiment suggests that Asia might even emerge as an economic haven, as America and Europe are still struggling with the Covid-19 pandemic.
When President Donald Trump surprisingly ended stimulus negotiations with a Tuesday tweet, U.S. stocks sank. Many Chinese stocks, notably Alibaba, held up.
Hedging U.S. portfolios with Chinese stocks, particularly Alibaba, might seem outlandish, but Susquehanna Investment Group, a top options-trading firm that seeks out noncorrelated U.S. equity investments, has significant China exposure. The secretive trading company owns a huge piece of ByteDance, the parent company of TikTok, that could be worth more than $15 billion. The investment would probably dwarf anything the firm’s partners have ever realized in a long history of extraordinary success.
But adding China exposure, especially Alibaba, to a portfolio offers hedging through diversification.
In 2019, Singles Day sales totaled $38 billion, up from $31 billion in the previous year. This year’s event will indicate how much Asian consumers have recovered from the coronavirus. Powerful sales results will intrigue investors who are worried about the sclerotic U.S. and European economies and concerned about political mishandling of the Covid-19 pandemic.
With Alibaba’s stock at $296.50, investors can sell Alibaba’s November $295 put for $18.20 and buy Alibaba’s November $300 call for $17.60. The trade generates a credit of 60 cents. If Alibaba’s stock is at $310 at expiration, the call is worth $10. Should the stock price be below the put strike price at expiration, investors are obligated to buy the stock at the strike price, or to cover the put at a higher prices.
During the past 52 weeks, Alibaba’s stock has ranged from $161.68 to $299. Shares are up 80% over the past year.
Reports indicate that China’s economy is already recovering from the coronavirus. Goldman has even advised clients that Asia is well positioned compared with other areas because it has contained the virus. The irony is unpleasantly rich.
Author: Steven M. Sears
The Risk Is Worth the Reward for Sorrento Stock
Since the novel coronavirus emerged earlier this year, it has dominated the stock market. Biotech investors have been searching for the pandemic’s big winner — a firm that can create an effective vaccine. Some firms are going beyond just a vaccine though — in addition to a vaccine, Sorrento (NASDAQ:SRNE) is working on a coronavirus test as well as several treatment options. SRNE stock has been volatile, to say the least, but for investors with a strong stomach, it looks like a good coronavirus play.
This week saw SRNE stock pop on news that the Salicyn-30, one of the company’s potential Covid treatments, offered encouraging results in preclinical testing.
This particular drug could be a stand-alone therapy as or part of a “drug cocktail,” and the promising results gave investors reason to rush back into the stock.
On Oct. 13, the firm will reveal the progress it’s made on coronavirus “drug cocktail” treatments, and investors are excited. President Donald Trump’s coronavirus diagnosis and subsequent treatment have caused treatment stocks like Sorrento to rise on hopes that doctors may have a handle on treating the virus effectively.
While the firm’s Covid cocktail is still in the early stages of approval, it could become available as an experimental treatment sooner than later as the FDA prioritizes fighting the pandemic. On Oct. 13 investors will learn of SRNE’s progress on the treatment, and the data is expected to bode well for the stock.
Treatment options aren’t the only reason SRNE stock makes the list among coronavirus investments. The firm is also working on a saliva-based test that could become a game-changer when it comes to society functioning as-normal during a pandemic. The market for Sorrento’s COVI-TRACK, an antibody test that offers fast results, and COVI-TRACE, a rapid-result diagnostic test, looks promising once they’ve been approved by the FDA.
Notably, SRNE isn’t the only company out there working full-pelt on a range of tools to fight the pandemic. It’s also not first in line to be approved for … anything. But that’s actually a good thing for Sorrento investors, because it means the stock hasn’t ballooned to unreasonable levels on hype just yet.
When it comes to vaccines, first is best, but for everything else, the market is big enough for more than one player. That’s especially true in the testing space because the demand for coronavirus tests will ultimately continue to rise until the pandemic is under control. With that in mind, there’s still plenty of room for SRNE to break into the market and grab a slice of that pie.
While Sorrento’s coronavirus-related pipeline looks stacked, the company has put almost all of its eggs in one basket when it comes to future revenue. There’s a real chance that SRNE’s coronavirus plays won’t pan out, which would leave Sorrento investors in a terrible position. While the company does have other therapies in its portfolio, they don’t justify its $3 billion market capitalization.
Not only that, but Sorrento is considerably smaller than most of its rivals in the race to defeat coronavirus. That means the reward will be larger if Sorrento is successful, but it also means there’s a lot of volatility on the horizon for SRNE stock.
With that said, the risks investors are facing look worth the potential rewards when it comes to SRNE stock. The firm is one of the few biotechs whose valuation hasn’t been blown completely out of proportion on hopes of a coronavirus vaccine.
It’s unlikely that all of Sorrento’s coronavirus efforts will succeed, but for now, the stock seems to have priced in low odds of any success, and that leaves the door open for an attractive entry point for investors willing to take on some risk and wait out the volatility.
On the date of publication, Matt McCall did not have (either directly or indirectly) any positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article had a long position in SRNE.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. Click here to see what Matt has up his sleeve now.
Matt McCall and the InvestorPlace Research Staff, Editor, MoneyWire
Cramer: Don’t buy Regeneron stock just because Trump says its coronavirus antibody cocktail works
CNBC’s Jim Cramer advised investors on Thursday to not buy shares of Regeneron Pharmaceuticals simply because President Donald Trump touted the company’s potential coronavirus treatment.
Regeneron’s stock was 2% higher Thursday. In a video Wednesday, Trump claimed that Regeneron’s experimental antibody treatment for Covid-19, which he received for his illness, was “a cure.”
“Please don’t buy Regeneron today,” Cramer said on “Squawk on the Street,” tamping down expectations about the effectiveness of the antibody treatment and the potential boost it would provide to the company’s earnings. “You want to maybe think more about Regeneron because it’s got good science. That’s fine,” he added.
Cramer has long been a fan of the Regeneron, recommending investors buy it when it was around $5 per share. It closed Wednesday’s session at $591.69, a nearly 5% rise since Trump disclosed his Covid-19 diagnosis in the early morning hours of Friday. Regeneron’s Dr. Len Schleifer was the first CEO to appear on Cramer’s show “Mad Money” in 2005.
“It’s really Dupixent. It’s [Regeneron’s] drug that is for all sorts of different ailments involving inflammation that is far more important to owning the stock,” Cramer said.
Despite Trump’s pronouncement about the antibody drug, there is still only early data available surrounding its potential effectiveness as a treatment. Additionally, Trump received other treatments for the coronavirus, such as Gilead Sciences’ antiviral remdesivir, so it’s difficult to ascertain the impact of any one drug when not received in a randomized clinical trial.
“I feel like the president has created a false expectation, even though it is pretty good,” Cramer said.
Trump received the antibody cocktail for his case of Covid-19 on a compassionate use basis. But on Wednesday, Regeneron announced it has applied for emergency use authorization with the Food and Drug Administration. The Tarrytown, New York-based company said in a statement that the U.S. government has committed to make doses of the antibody cocktail “available to the American people at no cost,” should its EUA application approved.
Cramer said that is a key piece of information investors need to remember when they consider whether to buy the stock, even though he thinks “Regeneron is a great company.”
“They did make money. They got paid by the government,” Cramer said. “[But] this is not like they’re suddenly making Humira, the greatest selling drug of all time, or they’re not making Keytruda.”
Humira from AbbVie is used to treat conditions including rheumatoid arthritis, plaque psoriasis and Crohn’s disease. Keytruda, made by Merck, is an immunotherapy drug used to help fight certain cancers.
Author: Kevin Stankiewicz
DDD Stock News: Why 3D Systems Is Rallying Higher Today
It looks like 3D Systems (NYSE:DDD) is ready for bigger and better things. A little bit of industry sleuthing — and an interesting connection to electric vehicle leader Tesla (NASDAQ:TSLA) — have DDD stock climbing higher Thursday. This comes after shares closed out Wednesday up by almost 20%.
So what exactly happened? And what do investors need to know about DDD stock here?
Well, it all started with a job posting. Investors caught wind of the fact that Tesla is hiring for a new additive manufacturing technician. Hint: Many in the know understand that additive manufacturing is just a fancy way of saying 3D printing. But Tesla made it even more obvious. The job posting — which went up in late August — says the company is looking for an individual to support its “rapidly growing” additive manufacturing operation.
Investors also would likely appreciate knowing the job posting is for Gigafactory in Nevada.
Now this is where the sleuthing starts. Many industry enthusiasts know that Tesla has relied on 3D printing before for its prototypes, but not necessarily manufacturing. Digging deeper, this has led many to believe Tesla will soon look to acquire more printers. Turns out, 3D Systems has some of those! Wall Street started sending 3D Systems stock higher yesterday because the company is one of the leading suppliers of 3D printers and other solutions.
Also helping support this theory is that SpaceX, the sister of Tesla, has a much more robust reliance on 3D printing technology.
Simply put, any moves by Tesla into the world of 3D printing could be a big deal for 3D Systems and its peers. We have seen the electric car giant make waves in the mining and solar worlds. Could DDD stock get a much more sustained lift soon? Investors are also bidding up rivals ExOne (NASDAQ:XONE) and Stratasys (NASDAQ:SSYS) on the same hopes.
But investors need to know the full story with 3D printing. It could very well be an innovation that is about to transform manufacturing as we know it, and not just for Tesla.
Amid the novel coronavirus pandemic, all sorts of companies turned to 3D printing. One report said these printers were on the “front lines” — ramping up production of protective equipment like face masks and shields. Many healthcare workers said this was critical at a time when the traditional equipment supply chain was broken.
Essentially, keep DDD stock on your radar. A rise of innovation in all aspects of manufacturing, as well as U.S.-China trade risks, gives 3D systems quite a bit of potential.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article
Sarah Smith is a Web Content Producer for InvestorPlace.com.
Sarah Smith, InvestorPlace Web Content Producer