It seems like everybody is talking about just two stocks on Wall Street, in the same week that Apple announces it is having iPhone issues, and more MyWallSt stocks announce earnings.
Electric car maker Tesla (NASDAQ: TSLA) and space tourism provider Virgin Galactic (NYSE: SPCE) continues to rally, showing a shifting trend among investors towards riskier stocks.
What’s driving this popularity?
Once again, Tesla stock surpassed the $900 per share mark this week as investors continue to put their faith in Elon Musk’s divisive company. The continued surge in stock price comes off the back of a number of analysts boosting their price targets for Tesla, which has seen its stock rise 120% in 2020, in stark comparison to the S&P 500, which is up just 3.5% in the same time period. Another company demonstrating the market’s current preference for risky trades is Virgin Galactic, which has surged nearly 350% in the past 3 months alone and saw 8 straight days of gains come to an end on Thursday. Richard Branson’s space venture is among a number of private space companies that have garnered the public’s interest in recent months. However, being the first publicly traded space tourism firm seems to be paying off, with Virgin piggybacking off this surge in interest. This risky behavior from investors may need dialing back, as coronavirus chaos could disrupt Tesla’s supply chain for the year, while Virgin has yet to outline a path towards profitability.
Bet you didn’t know
Each passenger of Virgin Galactic’s tourist flights will get a window seat with another window overhead that has a view of 10 miles in each direction.
Apple (NASDAQ: AAPL) may not have enough iPhones to sell in the first quarter of 2020 as the coronavirus continues to wreak havoc on supply chains.
How did investors react?
Apple’s stock price fell 2% on Tuesday following a surprise investor update that cautioned investors that its first-quarter sales could take a hit due to the coronavirus outbreak in China. Not only is Apple expecting sales in the important Chinese market to drop, but it is also forecasting a drop in iPhone production as the majority of its products are made in the region, with factories still not fully operational after a temporary shutdown. A dip in share price is perfectly normal after such an announcement, but it pales in comparison to how investors reacted this time last year to declining iPhone sales growth, where Apple tumbled 10% in its worst single-day performance in 6 years. Now, however, continued focus on subscription revenue and the success of wearables and services have made the iPhone less pivotal to the company’s overall operation.
Bet you didn’t know
In 1983, Apple computer developer Hartmut Esslinger designed a landline phone that used a stylus-controlled interface. It never saw the light of day.
Big Tech has been dragging the S&P over the line with its EPS growth, according to Goldman Sachs (NYSE: GS).
What’s going on?
Even if the “FAAMG” gang didn’t make Fortune’s ‘100 Best Places To Work’ this week, they can still pride themselves in the knowledge that they alone account for the S&P 500′s year-over-year EPS growth. Overall, the S&P’s fourth-quarter earnings are up 2%, but without these 5 stocks, the index’s year-over-year earnings growth is flat. In fact, Facebook (NASDAQ: FB), Amazon (NASDAQ: AMZN), Apple, Microsoft (NASDAQ: MSFT), and Google (NASDAQ: GOOG)(NASDAQ: GOOGL) now account for 18% of the S&P 500’s total value. The last time there was such high concentration among just 5 names was during the tech bubble, but this time around, Goldman said the market’s composition appears to be on firmer ground, stating: “Lower growth expectations, lower valuations, and a greater re-investment ratio suggest the current concentration may be more sustainable than it proved to be in 2000.” Let’s hope they are right.
Bet you didn’t know
If you combine the total wealth of Big Tech, it will amount to roughly $5.5 trillion, or 25% of U.S. GDP in 2019.
The stock market keeps chugging on, as more MyWallSt stocks announce earnings this week, including IMAX (NYSE: IMAX) and Boston Beer (NYSE: SAM).
How did they get on
Sam Adams parent company Boston Beer saw its stock fall after hours Wednesday after reporting lower-than-expected earnings per share of $1.12 on revenue of $301.3 million. Management remains optimistic, however, following the addition of Dogfish Head brands.
Smartwatch maker Fitbit (NYSE: FIT) reported its worst-ever fourth-quarter earnings this week with losses of $120.8 million, or $0.46 a share, on sales of $502.1 million. This comes in the midst of an antitrust investigation by the federal courts and the EU into Google’s acquisition of the company last November.
Cinema technology maker IMAX rose after hours Wednesday following a surprise earnings beat, with total revenue rising 14% to $124.3 million on the back of a blockbuster year at the box office, boosted by the company’s partnership with Disney.
Gunshot detection company Shotspotter (NASDAQ: SSTI) opened on the market Wednesday morning up more than 30% after the firm reported a revenue increase of 12% to $10.9 million from the year before, thanks largely to a strong finish to 2019 as its operating model begins to hit full stride.
Israel-based Wix (NASDAQ: WIX) reported on Thursday a quarterly growth of 19% to $204.6 million, thanks to net growth of 89,000 premium subscribers last quarter to reach 4.5 million paying customers. The company thanked its change to becoming a full operating system to run small businesses for its success.
Real estate company Zillow Group (NASDAQ: ZG) surprised on earnings with revenues rising 158% to $944 million for the quarter, bringing full-year revenue up 106%. The rise is powered by rapid expansion in Homes and growth in the Premier Agent business.
Bet you didn’t know
There are more than 1,500 IMAX theatres in more than 80 countries and territories around the globe, but only 1 in MyWallSt’s native Ireland. This country is too small sometimes.
I was sitting peacefully at my desk this week, minding my own business, when my Chief Editor James sent me this horrific image of a Burger King patty under the headline: “Burger King portrays moldy Whopper in new TV ad”. Needless to say, after seeing that image, I felt personally attacked by my boss, I almost threw up my lunch, and immediately contacted HR. So I thought I would share my suffering with you, my adoring fans. The image is part of a campaign by Yum Brands-owned Burger King (NYSE: YUM) to show that it is removing artificial preservatives from its signature burger across several markets in the U.S. and Europe. This comes after McDonald’s (NYSE: MCD) announced in 2018 that it was removing artificial colors, flavors, and preservatives from seven of its burgers. I have a lot of respect for the message behind the image, as it shows how food should naturally decompose without harmful additives. But seriously, come on, a simple tagline saying ‘we’ve removed artificial preservatives’ would have sufficed. Now this image will haunt my dreams forever…
One-up on McDonald’s?
Back in 2009, arch-rival McDonald’s closed all of its restaurants in Iceland. One Icelander decided to test the theory that McDonald’s never decomposes, and has been live-streaming his burger and fries for more than a decade. The scary result is that more than a decade later, the meal still doesn’t look more than a day old.
Bet you didn’t know
The original Insta-famous brand, Burger King was called ‘Insta-Burger King’ when it first opened in 1954.
MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.