In this article, we will discuss some of the popular stocks trending this week.
US equity markets are in the green as of August 8 as we head towards the end of the earnings season. The following week will see data regarding inflation levels being published. The Consumer Price Index (CPI) will be reported on Wednesday, and investors are expecting a slight decline in the rate due to lower fuel prices in July. Analysts are expecting CPI to be posted at 8.7% for July as opposed to 9.1% a month earlier.
The S&P 500 Index has closed in the green for the past three consecutive weeks. Notable companies such as Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Tesla, Inc. (NASDAQ:TSLA) are amongst the stocks trending this week.
Let’s discuss why these stocks are trending this week and see how hedge funds are positioned in them.
10. Bed Bath & Beyond Inc. (NASDAQ:BBBY)
Number of Hedge Fund Holders: 15
Bed Bath & Beyond Inc. (NASDAQ:BBBY) has rocketed 40.07% this week. The New Jersey-based operator of bedding, bathroom, kitchen, and home décor retailers, is looking to close in the green for the tenth consecutive day.
Experts think that Bed Bath & Beyond Inc. (NASDAQ:BBBY) stock is experiencing a short squeeze as the company’s short interest ratio increased to an 18-month high of 46.1% as of July 31. On August 5, Bed Bath & Beyond Inc. (NASDAQ:BBBY) stock gained 32% as 52.76 million shares exchanged hands without the presence of any significant news in the market. Bed Bath & Beyond Inc. (NASDAQ:BBBY) was one of the most mentioned stocks on Reddit’s WallStreetBets forum on August 8.
Bed Bath & Beyond Inc. (NASDAQ:BBBY) was discussed in the Q2 2022 investor letter of Miller Value Partners. Here’s what the firm said about the company:
“Bed Bath & Beyond 5.165% 08/2044declined 67.4% in the period. Bed Bath & Beyond reported 4Q21 sales of $2.05 billion, down 22% Y/Y, missing consensus of $2.08 billion. The company lost $0.92 per share in the quarter, down from 4Q20 adjusted EPS of $0.40, below analyst expectations for EPS of $0.03. Management noted supply chain disruptions and the Omicron variant led to inventory availability challenges, which had an estimated sales impact of $175 million, or 8.5% of 4Q21 net sales, and a 400 basis points (bps) Y/Y contraction in 4Q21 adjusted gross margin to 28.8%, driven by product cost increases and higher than anticipated freight and shipping costs. Additional headwinds in the quarter included general weakness in the retail segment, highlighted by big earnings misses from Walmart and Target, along with Moody’s downgrading Bed Bath’s corporate family rating from B1 to B2. The ratings agency cited increased execution risk of the company’s strategic turnaround initiatives and ongoing supply chain issues weighing on the company’s market share and profitability going forward as the main drivers for the downgrade. However, Moody’s maintained a stable outlook for the retailer due to the financial flexibility provided by the company’s liquidity position and low level of funded debt.”
Bed Bath & Beyond Inc. (NASDAQ:BBBY) was held by 15 hedge funds at the end of Q1 2022.
9. First Solar, Inc. (NASDAQ:FSLR)
Number of Hedge Fund Holders: 35
First Solar, Inc. (NASDAQ:FSLR) has risen 9.98% this week after the Tempe, Arizona-based provider of photovoltaic (PV) solar solutions was upgraded from a Neutral to an Overweight rating by Mark Strouse at JPMorgan. The analyst also revised the price target on First Solar, Inc. (NASDAQ:FSLR) from $83 to $126. Strouse highlighted the passing of the Inflation Reduction Act as the biggest policy step in the history of the US in accelerating the transition from conventional to renewable sources of energy. The analyst thinks that First Solar, Inc. (NASDAQ:FSLR) is in the best position to leverage the bill. Although there are chances that the bill may be amended when it is presented in the House of Representatives, it is highly unlikely that the salient features of the bill would be changed.
Beech Hill Partners was the leading hedge funds investor in First Solar, Inc. (NASDAQ:FSLR) during Q2 2022.
8. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 36
Palantir Technologies Inc. (NASDAQ:PLTR) has plummeted 14.07% this week after the Denver, Colorado-based data analytics entity reported mixed Q2 2022 results and provided weak guidance for FY22.
Palantir Technologies Inc. (NASDAQ:PLTR) reported an adjusted loss per share of one cent, as opposed to the analysts’ forecast of a profit of three cents per share. In contrast, Palantir Technologies Inc. (NASDAQ:PLTR) saw its revenue increase by 26% YoY to $473 million, outperforming the consensus estimate of $471.7 million.
For Q3 2022, the company anticipates revenue to be in the range of $474 million – $475 million, lower than the forecast of $508.23 million. Furthermore, for FY22, Palantir Technologies Inc. (NASDAQ:PLTR) is expecting revenue of $1.9 billion, which also fell short of analysts’ forecast of $1.98 billion.
As of Q1 2022, 36 funds reported owning a stake in Palantir Technologies Inc. (NASDAQ:PLTR).
7. Barrick Gold Corporation (NYSE:GOLD)
Number of Hedge Fund Holders: 45
Barrick Gold Corporation (NYSE:GOLD) is up 3.91% this week after the Canadian miner reported better-than-expected results for Q2 2022.
Barrick Gold Corporation (NYSE:GOLD) reported revenue and adjusted EPS of $2.86 billion and 24 cents, respectively, which outperformed the analysts’ forecast of $2.85 billion and 22 cents. The company also benefitted from higher copper production during the quarter. Barrick Gold Corporation (NYSE:GOLD) anticipates meeting the annual guidance for copper and gold production. However, CEO Mark Bristow highlighted that the supply of copper would not be able to keep up with the increased demand for the metal as heavy metals are an integral part of clean energy initiatives.
Here’s what ClearBridge Investments said about Barrick Gold Corporation (NYSE:GOLD) in its Q2 2022 investor letter:
“In addition to Iberdrola, new purchases among structural growers during the quarter included Canadian mining company Barrick Gold Corporation (NYSE:GOLD), which is seeing operating improvements in its business. The company has aggressively delevered its balance sheet and reduced capex spending to a lower level, directing its healthy free cash flow to dividends and buybacks.’’
6. Coinbase Global, Inc. (NASDAQ:COIN)
Number of Hedge Fund Holders:46
Coinbase Global, Inc. (NASDAQ:COIN) has surged 9.26% this week after notable cryptocurrencies like Bitcoin USD (CCC:BTC-USD) and Ethereum (CCC:ETH-USD) are rallying following a positive job report for July 2022. In the last 24 hours, Bitcoin and Ethereum have gained 4.4% and 6.1%, respectively.
Coinbase Global, Inc. (NASDAQ:COIN) soared last week when BlackRock, Inc. (NYSE:BLK) entered into a partnership with the company. The deal would allow BlackRock, Inc.’s (NYSE:BLK) institutional investors to buy and sell Bitcoins on the cryptocurrency exchange platform. Following this development, Carlton Lai at Daiwa gave Coinbase Global, Inc. (NASDAQ:COIN) stock a Buy rating with a target price of $100 in a note issued to investors on August 8.
Rowan Street Capital LLC shared its stance on Coinbase Global, Inc. (NASDAQ:COIN) in its Q2 2022 investor letter. Here’s what the firm said:
“The mentality of a passionate Founder/CEO drives a completely different thought process and decision-making that makes all the difference. This is a quote by Brian Armstrong, Founder and CEO of Coinbase (NASDAQ:COIN):
‘I can speak with some authority and say we are not going to do that because this is not why I started the company – I don’t have to give any other justification. Rather than the professional CEO that comes in that is accountable to Wall Street and quarterly earnings may start thinking about the company differently. One of the most scarce things in companies today is risk tolerance. For example, take Tesla vs. Waymo. Tesla launched self-driving cars while Google didn’t. The reason is the founder-CEO (Elon Musk) said that I care enough about the mission that we are ready and we are gonna go for it. Whether a professional CEO is thinking about his/her career trajectory, the founder CEO doesn’t care about the next job and only cares about the mission.’”
In addition to Coinbase Global, Inc. (NASDAQ:COIN), popular stocks such as Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Tesla, Inc. (NASDAQ:TSLA) are also trending this week.
5. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 79
Pfizer Inc. (NYSE:PFE) has gained 0.3% this week after the New York-based pharmaceutical giant announced the acquisition of Global Blood Therapeutics, Inc. (NASDAQ:GBT) for $5.4 billion or $68.50 per share.
Pfizer Inc. (NYSE:PFE) has made this move to boost its drug pipeline as it anticipates a potential slowdown in demand for COVID-19 vaccines and other medications following a decline in the number of Covid-19 cases globally. Global Blood is a blood disorder drugmaker, having Oxbryta in its portfolio. The drug was approved by the FDA in 2019 for the treatment of sickle cell disease in patients aged 12 or older.
ClearBridge Investments shared its stance on Pfizer Inc. (NYSE:PFE) in its Q4 2021 investor letter. Here’s what the investment management firm said:
“While the level of general turnover abated as we progressed through 2021, it remained high in one area: post-COVID-19 recovery plays. The concept behind this investment thesis was, and still is, straightforward: with the advent of effective vaccines, the path from pandemic to endemic is just a matter of time. As this transition occurs, the estimated excess savings of over $2 trillion built up on U.S. consumer balance sheets will unlock dramatic pent-up demand for experiences, especially global travel. This investment case seemed especially compelling when the Pfizer vaccine positively surprised markets in November 2020. As a result, we made post-COVID-19 stocks (which were trading well below our estimate of recovery value) a sizable theme within the portfolio. We understood this to be a more aggressive tilt in positioning because it required a major improvement in demand to catalyze fundamentals and drive price toward higher business values. While we accepted that recovery would not be smooth and that it would take time to deploy vaccines both domestically and globally, we decided that recovery was the logical path of least resistance and we were being well compensated for these risks.
What we did not account for, however, was vaccine hesitancy and the risk of further infection waves. As a result, the first variant wave, Delta, was a negative surprise to both the market and our team. When the risk surfaced, we immediately updated our probability-driven models and debated how we should react. The resulting conclusion was that the recovery would be delayed and that we should reduce our exposure quickly, subsequently targeting the most aggressive recovery stocks such as cruise lines. We again acted swiftly and decisively to the positive surprise that Pfizer had delivered a high-efficacy antiviral COVID-19 pill. This pill should greatly reduce COVID-19 severity risks globally, increasing the probability of a global travel recovery in 2022. While this is still true, the emergence of the highly mutated Omicron variant set off another infection wave which spurred us to again act quickly and further reduce our risk exposure. This back-and-forth may sound exhausting, but it highlights our compulsion to act if we determine a surprise has a large enough impact on the probabilities that power our valuation-driven investment cases.
Pzena Investment Management was the leading hedge fund investor in Pfizer Inc. (NYSE:PFE) as of Q2 2022.
4. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 80
Tesla, Inc. (NASDAQ:TSLA) is trending this week after the US Senate approved the Inflation Reduction Act over the weekend. The bill will provide an EV tax credit for nearly a decade as a way to safeguard the environment. The US government has renewed the $7,500 EV tax credit till the end of 2032. However, there have been some amendments to qualify for this tax credit. The EV eligible for tax credit should be assembled in North America, and the key materials in the battery must be from the US or a nation that has a free-trade agreement with the US. Tesla, Inc. (NASDAQ:TSLA) is expected to be a beneficiary of this development due to the presence of its manufacturing facilities in the US.
Here’s what Fiduciary Management said about Tesla, Inc. (NASDAQ:TSLA) in its Q1 2022 investor letter:
“Remarkably, the Nasdaq-100 and Russell 2000 indices are up 6.25% and 3.90% through 3/31/22, respectively, since the war started. Tesla, Inc. (NASDAQ:TSLA) went up 57% from its low on February 24 ($700) to the close on March 29th ($1099), which equates to an advance of $413 billion. To put that in perspective, the 24-trading day gain in Tesla was greater than the entire market value of Walmart, Inc.! Tesla trades for 120 times estimated 2022 GAAP2 earnings, compared to Walmart’s (NYSE:WMT) 21.8 multiple (1/2023 fiscal year).”
Of the 912 hedge funds in Insider Monkey’s database, 80 funds held a stake in Tesla, Inc. (NASDAQ:TSLA) at the end of Q1 2022.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 102
NVIDIA Corporation (NASDAQ:NVDA) has slumped 4.65% this week after the Santa Clara, California-based inventor and leading producer of the graphic processing unit (GPU) reported preliminary revenue for Q2 2022. NVIDIA Corporation (NASDAQ:NVDA) anticipates revenue to decline 19% YoY to $6.40 billion due to weakness in the gaming business. In contrast, the analysts had expected the company to report revenue of $8.1 billion. NVIDIA Corporation (NASDAQ:NVDA) is set to announce its Q2 2022 results on August 24. In the last eight quarters, the company has outperformed revenue estimates on seven occasions.
NVIDIA Corporation (NASDAQ:NVDA) was discussed in the Q2 2022 investor letter of ClearBridge Investments. Here’s what the firm said:
“Chipmaker Nvidia (NASDAQ:NVDA) has also been pressured by multiple compression of higher growth companies and weakness in its gaming business. While Nvidia has grown into a top 10 position with its strong performance through late 2021, we have been consistently trimming the position to derisk against short-term volatility in its gaming business. The company is clearly exposed to the semiconductor cycle but also participates in the secular growth of cloud and AI adoption through its data center business. With these secular drivers intact and new products ramping up in the second half of the year, we are maintaining an overweight to the company.”
ARK Investment Management increased its stake in NVIDIA Corporation (NASDAQ:NVDA) to over $126.2 million at the end of Q1 2022.
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 131
Apple Inc. (NASDAQ:AAPL) is 1.27% in the green this week after Dan Ives at Wedbush gave positive commentary on the tech giant. Apple Inc. (NASDAQ:AAPL) was also selected as one of the top three tech stocks by Wedbush Securities for the second half of 2022.
Ives thinks that Apple Inc. (NASDAQ:AAPL) is set to benefit from the fourth industrial revolution. He added that the challenges related to supply chain and China seem to have peaked, and Apple Inc. (NASDAQ:AAPL) is now focused on the demand production of the iPhone 14, which is expected to launch in September 2022. There has been news in mainstream media that the Cupertino, California-based company has ordered its suppliers to increase production from 90 million units to 95 million units. Ives highlighted that 225 million Apple users had not upgraded their devices in the last three-and-a-half years due to the pandemic and other reasons. This reflects pent-up demand for iPhone 14.
Wedgewood Partners was bullish on Apple Inc. (NASDAQ:AAPL) in its Q2 2022 investor letter. Here’s what the firm said:
“Apple grew revenues +9%, driven by +17% growth in the Services segment. While iPhone revenues grew a modest +5%, it was on an exceptional year ago comparison of +66%. iPhone continues to capture most industry smartphone profits by focusing on high-end price tiers. Apple is taking nearly two-thirds of the revenue share in the premium ($400 and above) smartphone segment. Further, most of the growth was driven by expansion in the “ultra-premium” price tier of $1000 or more per unit.[1] As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially integrated circuits) and software continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 259
Microsoft Corporation (NASDAQ:MSFT) has risen 0.88% this week after investment firm Wedbush shortlisted the company as one of the top three tech stocks for 2022.
Dan Ives at Wedbush thinks that the growth outlook of the Microsoft Corporation’s (NASDAQ:MSFT) Azure cloud computing segment is expected to remain stellar during FY23. Microsoft Corporation (NASDAQ:MSFT) is in the middle of shifting workloads to the cloud. The analyst has given an Outperform rating on Microsoft Corporation (NASDAQ:MSFT) stock with a target price of $340.
Baron Funds shared its outlook on Microsoft Corporation (NASDAQ:MSFT) in its Q1 2022 investor letter. Here’s what the firm said:
“Shares of mega-cap software company Microsoft Corporation (NASDAQ:MSFT) pulled back with the broader software sector. The company posted another solid quarter, highlighted by total revenues increasing 20% and Microsoft Cloud revenues, now 45% of total revenues, growing 32%. These results were driven, in large part, by strong demand for large Azure contracts. We believe Microsoft can compound revenue in the low double digits for the next three years, underpinned by its expansion in its total addressable market and market share gains.”
Impax Asset Management was the leading hedge fund investor in Microsoft Corporation (NASDAQ:MSFT) during Q2 2022.
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Disclose. None. 10 Trending Stocks This Week is originally published on Insider Monkey.
