Month: October 2022

The Commonwealth Bank of Australia (ASX: CBA) share price has officially pushed past the monumental $100-mark for the first time since August.

All eyes have been on the S&P/ASX 200 Index (ASX: XJO) banking giant this week to see if it could surpass the milestone that it momentarily met on Tuesday.

The CBA share price is trading 0.47% higher at $100.25 at the time of writing.

Meanwhile, the ASX 200 has lifted 0.41% and the S&P/ASX 200 Financials Index (ASX: XFJ) is up 0.25%.

So, what could be in store for the CBA share price now that it has returned to triple digits? Let’s take a look.

Could the CBA share price push higher?

The CBA share price is in the green today and lifting to its highest point in two months.

And once again, it has surpassed the $100-mark. The stock hit triple digits for the first time ever in May 2021 before rocketing to an all-time high of $110.19 in November 2021.

Today, it remains around 10% off that record. But could CBA shares keep climbing to meet – or surpass –their previous high?

If you ask experts, they’d likely tell you not to get your hopes up.

Most are bearish on the CBA share price, with top broker Morgan Stanley tipping it to fall to $85.50, as per Livewire – a potential 14.7% tumble.

Though, not all are so sceptical. Credit Suisse expects it to lift to $102.80, my Fool colleague James reported late last month. The broker is also tipping the banking giant to up its dividends by 10% in financial year 2023.

The latest news likely bolstering hope for the biggest of the big four banks came from its far smaller peer, Bank of Queensland Limited (ASX: BOQ).

On releasing its full-year earnings last week the Queensland-based bank revealed its net interest margin (NIM) had lifted to 1.81% in the final quarter amid rising rates.

It’s therefore presumable that other ASX 200 banks have also seen their NIMs increase, thereby upping their profits.

The post CBA share price smashes through $100-mark for first time in 2 months. What’s next? appeared first on The Motley Fool Australia.

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More reading

• CBA shares: Buy, hold, or fold?
• Is the CBA share price a good value buy in October?
• Top broker says ‘we struggle to see CBA underperforming peers’. Here’s why
• Why are ASX 200 bank shares having such a top run on Thursday?
• Why investors were looking on the bright side for ASX 200 bank shares today

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Calix Ltd (ASX: CXL) share price is frozen after the company requested a trading halt this morning.

The Australian environmental technology company has since announced a global licence agreement with one of the world’s largest building materials companies, Heidelberg Materials (FWB: HEI).

Calix is also launching a $60 million institutional equity raising. It will also run a share purchase plan (SPP) for ordinary ASX investors to raise up to another $20 million.

Calix will use the funds to accelerate the commercialisation of its technology for industrial decarbonisation.

This will include further work with Pilbara Minerals Ltd (ASX: PLS).

Licence the ‘first of its kind’

Calix said in a statement that the technology licence fee is a first-of-a-kind for the industry.

It comprises a royalty floor, a variable component linked to carbon price/value, and a royalty cap linked to costs versus alternative technologies.

As we’ve reported before, a bunch of Australian companies, including miners, have been trialling Calix technology to decarbonise their minerals.

The technology centres around a kiln developed by the Calix founder that can extract substantial amounts of carbon dioxide from metals and minerals. Additionally, Calix can adapt the kiln to work with various materials.

Calix has a 93% owned subsidiary, Leilac, that focuses on the decarbonisation of cement and lime. It’s Leilac that has signed the deal with Heidelberg Materials.

The licence applies to any Heidelberg Materials facility where the Leilac technology is installed.

Heidelberg Materials operates 149 cement plants across five continents.

Calix said:

Cement and lime are amongst the largest industrial contributors to climate change, accounting
for roughly 8% of global CO2 emissions.

The agreement with Heidelberg Materials is a key milestone in Calix’s commercialisation of the Leilac technology, and Calix’s strategy to develop great businesses that deliver positive global impact.

Why is Calix raising capital?

The capital raising will take the form of a fully underwritten institutional placement to raise $60 million. It will comprise the issuance of 13.2 million shares at an issue price of $4.55 per share.

The Calix share price is currently in the freezer at $5.12.

There will also be a non-underwritten SPP to raise up to an additional $20 million.

Calix said the placement and SPP will “accelerate commercialisation of the Calix technology platform and
enable rapid further technology development targeted at significant strategic market opportunities”.

The company elaborated further:

Specifically, proceeds from the Placement will be applied to accelerate commercialisation of Leilac’s cement and lime decarbonisation technology; construct a lithium salt demonstration processing plant in JV with Pilbara Minerals; and fund a FEED study for a ZESTY Green Iron demonstration plant.

Calix has released an investor presentation this morning.

Calix share price snapshot

The Calix share price is down 21.5% year to date.

Over five years, the company’s shares are up more than 700%.

The post Why is the Calix share price frozen on Wednesday? (Hint: it involves Pilbara Minerals) appeared first on The Motley Fool Australia.

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More reading

• Why is the Pilbara Minerals share price storming 6% higher on Wednesday?
• Is it time for ‘cashing in some gains’ on Pilbara Minerals shares?
• 3 ASX 200 companies among the top 10 lithium producers in the world
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• 3 ASX 200 lithium shares that turned a $10,000 investment into $500,000

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record another decent gain. At the time of writing, the benchmark index is up 0.4% to 6,807.6 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

GQG Partners Inc (ASX: GQG)

The GQG share price is down 2.5% to $1.39. This appears to have been driven by a broker note out of Goldman Sachs this morning. According to the note, the broker has downgraded this fund manager’s shares to a neutral rating and slashed its price target by 19% to $1.55. Goldman notes that GQG’s strong franchise can’t escape difficult market conditions.

Megaport Ltd (ASX: MP1)

The Megaport share price is down 16% to $7.11. Investors have been selling this network as a service provider’s shares following the release of its quarterly update. Megaport reported a 9% increase in monthly recurring revenue to $11.6 million during the first quarter. This took its annualised recurring revenue to $139 million. Investors may have been expecting even stronger growth.

Melbana Energy Ltd (ASX: MAY)

The Melbana Energy share price is down 10% to 7.3 cents. This morning this oil and gas exploration company responded to a price query request from the Australian share market operator. Melbana Energy advised that it could not explain the recent jump in its share price. Though, it has suggested that it could have been driven by comments on internet boards.

St Barbara Ltd (ASX: SBM)

The St Barbara share price has continued its slide and is down a further 6% to 49.5 cents. Investors have been selling this gold miner’s shares this week following a disappointing first quarter update. St Barbara’s update revealed weaker than expected production and higher costs, which has led to its full year guidance being downgraded.

The post Why GQG, Megaport, Melbana Energy, and St Barbara shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why Adbri, Rio Tinto, St Barbara, and Whitehaven Coal shares are dropping today
• Why are shares in ASX 200 gold miner St Barbara crashing 22% today?
• Here are the top 10 ASX 200 shares today
• Morgans names 2 ASX dividend shares to buy right now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The Nasdaq Composite has plunged deep into bear market territory, dragged down by deteriorating investor sentiment in the face of high inflation and rising interest rates. In fact, the tech-heavy index is now 34% off its high, marking its steepest decline in the last decade.

On the bright side, that broad downturn has created a wealth of buying opportunities for patient investors. For instance, in spite of temporary macroeconomic headwinds, the future looks bright for Microsoft (NASDAQ: MSFT) and Arista Networks (NYSE: ANET), and both stocks are trading at discounted valuations compared to historical price-to-earnings multiples.

Microsoft: An arsenal of critical software and cloud services  

Microsoft breaks its operations into three segments, each packed with widely adopted products. The first is Productivity and Business Processes, at the heart of which is Microsoft 365, the most popular collection of enterprise applications on the planet. In addition to the well-known Office software suite, Microsoft 365 includes market-leading products like Defender and Azure Active Directory for cybersecurity, and Microsoft Teams for communications.

The second segment is Intelligent Cloud, which houses Microsoft SQL Server, the third-most-popular database. But cloud computing platform Microsoft Azure is the heart of this segment. Azure captured 21% market share in cloud infrastructure services in the second quarter, second only to Amazon Web Services. 

The final segment is More Personal Computing, which features Xbox hardware and content, the ubiquitous Windows operating system, and the Bing search engine. But the most exciting part of this segment is advertising. Last year, Microsoft acquired ad tech platform Xandr from AT&T, and Netflix recently selected Microsoft as the ad tech vendor that will power its soon-to-launch ad-supported streaming service.

Broadly speaking, Microsoft’s arsenal of critical software products and cloud services makes it resilient, and that advantage has helped the company churn out solid financial results in spite of the difficult economic environment. Over the past year, revenue rose 18% to $198 billion, while free cash flow ticked up 16% to $65 billion. But Microsoft still has room to expand, especially in cybersecurity, cloud computing, and digital advertising.

In fact, the cybersecurity market will grow 12% annually to reach $500 billion by 2030, while the cloud computing market will grow 16% annually to reach $1.5 trillion, according to Grand View Research. Meanwhile, online video advertising spend will increase 14% annually to reach $362 billion by 2027, according to Omdia. Netflix is expected to be a key player in that market, which bodes well for Microsoft.

Currently, Microsoft stock is 32% off its high, and shares trade at 23.7 times earnings, a bargain compared to its five-year average of 35.1 times earnings. That’s why investors may regret passing on this growth stock.  

Arista Networks: Technology that powers the cloud

Arista has become the gold standard in high-speed data center networking. Its portfolio includes switching and routing platforms, wireless access points, and adjacent software for network automation, monitoring, and security. Those technologies allow customers to deploy a seamless network across public clouds, private clouds, and enterprise campus environments.

Arista says its principal innovation is the Extensible Operating System (EOS), the uniquely programmable software that runs across every piece of its hardware. That programmability makes Arista’s networking platforms very flexible, allowing customers to easily integrate and deploy third-party applications. Additionally, by running a single version of EOS across every switch and router, Arista makes network management less complex and costly compared to vendors like Cisco, which requires customers to run different versions of multiple operating systems across its hardware.

In short, Arista’s networking platforms offer industry-leading speed and power efficiency at a lower total cost of ownership. Those selling points have helped it win more than 8,000 customers, including cloud computing giants like Microsoft and Meta Platforms. In turn, Arista has delivered solid financial results on a relatively consistent basis. Revenue climbed 33% to $3.5 billion over the past year, and earnings soared 41% to $3.24 per diluted share.

Looking ahead, Arista is well positioned to maintain that momentum. Data centers will need faster networks to support the ongoing adoption of cloud computing, the growing number of connected devices (e.g. the Internet of Things), and the development of data-intensive applications (e.g. artificial intelligence). That should drive demand for Arista’s networking products in the coming years. In fact, management says its addressable market will grow from $23 billion in 2021 to $35 billion by 2025.

Currently, Arista stock is down 27% from its high, and shares trade at 30.8 times earnings, a slight discount to its three-year average of 33.5 times earnings. That’s why this growth stock looks like a buy right now. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Nasdaq bear market: 2 magnificent US growth stocks you’ll regret not buying on the dip appeared first on The Motley Fool Australia.

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More reading

• Why Microsoft stock is down 29% this year
• Tough year for leading global growth fund laid bare with brutal fall in tech stocks
• Why Warren Buffett loves this US stock
• This stock market investment strategy made money 100% of the time over the last century
• Following this streaming strategy could pay off big for Microsoft

Trevor Jennewine has positions in Amazon and Arista Networks. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Arista Networks, Cisco Systems, Meta Platforms, Inc., Microsoft, and Netflix. The Motley Fool Australia has recommended Amazon, Arista Networks, Meta Platforms, Inc., and Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Netflix Inc (NASDAQ: NFLX) share price is surging in after-hours trading after the streaming giant delivered better-than-expected quarterly results.

Netflix shares are currently lighting up 14% after hours after closing at US$240.86 overnight. 

Netflix has had a torrid run so far in 2022 as growth has slowed and subscriber numbers have ground to a halt. 

As it stands, Netflix shares have crumbled 60% this year to trade at levels not seen since 2018.

But Netflix’s fortunes could be turning. The company has reversed its subscriber losses in the most recent quarter thanks to some big programming wins. 

Netflix hits it out of the park in Q3 2022

For the third quarter of 2022, Netflix added 2.41 million net subscribers, well ahead of the company’s guidance of 1 million.

This was underpinned by some big hits across TV and film during the quarter, including the likes of Stranger Things, Monster: The Jeffrey Dahmer Story, The Gray Man, and Purple Hearts.

The fourth season of Stranger Things generated 1.35 billion hours viewed, making it Netflix’s biggest-ever season of an English series. 

Meanwhile, the Jeffrey Dahmer true crime limited series generated 824 million hours viewed in the first 28 days of its release. This makes it Netflix’s second-largest English series.

This helped the streaming giant to deliver third-quarter revenue of US$7.93 billion. That’s up 5.9% year on year and ahead of guidance of 5%.

Two major initiatives underway at Netflix are a crackdown on password sharing and a new, lower-priced, ad-supported subscription tier.

Coincidentally, this morning, I received an email from Netflix informing me of a new feature called ‘Profile Transfer’. The idea here is to make life easy for borrowers to transfer their Netflix profile to their own account, carrying across recommendations, viewing history, watchlists, and the like.

The company will also launch its budget-friendly, ad-supported subscription plan in 12 countries next month, including Australia.

For $6.99 per month – four dollars less than the cheapest plan currently on offer – users will be shown an average of four to five minutes of unskippable ads per hour of viewing.

What does this mean for ASX 200 tech shares?

Netflix’s better-than-expected results have boosted Nasdaq futures, which are up 1.5% according to Business Insider.

Combined with all three US benchmarks finishing in the green overnight, this has provided a positive lead for the S&P/ASX 200 Index (ASX: XJO) and ASX tech shares today.

At the time of writing, the ASX 200 has climbed 0.6% to 6,820 points.

Meanwhile, HUB24 Ltd (ASX: HUB) is currently the best-performing ASX 200 tech share. It’s jumped 3.5% to $26.09.

Other top risers include BrainChip Holdings Ltd (ASX: BRN) and Altium Limited (ASX: ALU). These ASX 200 tech shares are up 2.2% and 1.7%, respectively, at the time of writing.

The post What’s going on with Netflix and how is it impacting ASX 200 tech shares today? appeared first on The Motley Fool Australia.

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More reading

• Why Netflix stock was soaring today
• Tesla and Netflix will make or break the Nasdaq this week
• Netflix stock could be on the verge of a massive turnaround
• 97 reasons to double down on Netflix stock
• Why Netflix was a US stock market star on Thursday 

Motley Fool contributor Cathryn Goh has positions in Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Hub24 Ltd, and Netflix. The Motley Fool Australia has positions in and has recommended Hub24 Ltd. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s another day in the green for the All Ordinaries Index (ASX: XAO). These three All Ords shares are helping to drive it higher, reaching their highest point in years.

The benchmark index is up 0.43% right now at 7,006 points.

So, which ASX All Ords shares are posting multi-year highs on Wednesday? Keep reading to find out.

3 ASX All Ords shares hitting multi-year highs

First off the rank is the share price of All Ords travel favourite Qantas Airways Limited (ASX: QAN).

It took off earlier today, gliding 3% to peak at $6.075. That’s the highest it’s soared since the COVID-19 pandemic took hold of Australia in March 2020.

It was just last week the iconic airline told the market it’s expecting to return to underlying pre-tax profit in the first half of financial year 2023, providing guidance of between $1.2 billion and $1.3 billion.

Joining the airline in posting a multi-year high on Wednesday is the far smaller All Ords share, New Energy Solar Ltd (ASX: NEW). It shot upward to reach 99 cents today – marking a 0.5% gain and its highest point since August 2020.

The US$244.5 million sale of the solar investment company’s US assets is set to finalise this month.

Shareholders were expecting to receive 82 cents per share as part of a capital return shortly after the sale finalises. Though, that’s dependent on exchange rates at the time of completion.

New Energy Solar investors can also expect another return worth between 13 cents and 16 cents per share on the winding up of the company, expected before the end of next year.

The final ASX All Ords share posting a multi-year high today is Dalrymple Bay Infrastructure Ltd (ASX: DBI). The stock hit a high of $2.58 this morning, marking a 4% gain and a new all-time high.

The coal terminal operator’s stock has gained 17% since it lifted its distribution guidance earlier this month.

The post 3 ASX All Ords shares smashing multi-year highs today appeared first on The Motley Fool Australia.

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More reading

• Qantas share price surges to post-COVID high
• It wasn’t all bad news for ASX All Ords shares on Monday. Here are some big winners
• Has the Qantas share price finally left COVID in its contrail?
• Top brokers name 3 ASX shares to buy next week
• Why Jumbo, Origin, Qantas, and Woodside shares are racing higher

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Unlike its year-to-date performance, the Woodside Energy Group Ltd (ASX: WDS) share price has put on an underwhelming show so far this week.

Today, shares in the oil and gas producer are making their way lower again. As we head into the afternoon, Woodside is down 0.5% to $32.67 apiece, contrasting with the 0.56% gain in the S&P/ASX 200 Index (ASX: XJO).

As a result, the Woodside share price is now 3.9% behind its Friday closing price.

Oil prices go for a slip

When in the business of selling commodities, such as oil and gas, price is everything.

The difference between the cost for a company to extract it and the price it can sell it for determines the success of the operator. Hence, when the price of oil makes a move it tends to be reflected in the Woodside share price.

At the end of last week, the price per barrel of oil was hovering around US$85. Now, a barrel of crude is fetching US$83.77. All things considered, this is a relatively minor reduction in the commodity’s price. However, investors might be concerned about further price deterioration on the horizon.

Markets are dependent on supply and demand. In short, if supply increases prices go down — and if demand decreases prices go down. If we have both, then it’s a double whammy to the downside.

According to Reuters, the United States is looking to up its supply by releasing more oil from its strategic reserves. Simultaneously, there are growing concerns that demand from China — the world’s largest crude oil importer — could be in question.

Reportedly, China has indefinitely delayed the release of economic data for the People’s Republic. This action has commodity analysts presuming demand could be weakened by the country’s zero COVID-19 policy.

Still bullish on the Woodside share price

Allan Gray, a contrarian funds manager in Australia, shared their continued conviction in Woodside shares in its latest quarterly commentary.

According to the letter, the Allan Gray Australia Equity Fund maintains Woodside as its largest holding, at a 10% weighting. Although, the fund manager stated it has trimmed exposures in the energy sector to reallocate to other ideas.

The Woodside share price has been an exceptional performer in 2022, rising 43.8%.

The post Why is the Woodside share price having such a stinker this week? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• It’s a good day on the ASX 200. So why is the Woodside share price getting beaten up?
• Which ASX All Ords shares could perform well in a recession?
• 5 things to watch on the ASX 200 on Monday
• Top ASX dividend shares to buy in October 2022

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Core Lithium Ltd (ASX: CXO) share price is flying high again on Wednesday.

In afternoon trade, the lithium miner’s shares are up 8% to $1.38.

This means the Core Lithium share price is now up 20% this week.

Why is the Core Lithium share price rocketing higher this week?

Investors have been scrambling to buy Core Lithium’s shares for a few reasons.

One is a rebound in higher risk assets this week following a huge improvement in investor sentiment globally.

Another reason is the ongoing strength in lithium prices. Earlier this week, Pilbara Minerals Ltd (ASX: PLS) reported yet another increase in the price commanded for a 5,000-tonne lithium shipment via its online auction.

This followed news that Chinese lithium prices hit a record high last week thanks to strong demand from the electric vehicle market.

This ties in nicely with the third reason the Core Lithium share price is booming this week.

What is the third reason?

On Monday, Core Lithium revealed that its managing director, Stephen Biggins, brought forward his resignation from the role and exited the company with immediate effect.

Mr Biggins had resigned in March and planned to step down from the role before the end of 2022. However, with the recent official opening of the Finniss Lithium Mine and appointment of Gareth Manderson as CEO, Biggins has decided it is the appropriate time to complete his role as managing director and as a director of Core Lithium.

Clearly it is full steam ahead for Core Lithium and its Finniss Lithium Mine at a time when lithium prices are at record highs. This bodes well for the company and could see bumper profits being generated in the coming quarters.

The post Why has the Core Lithium share price surged 20% so far this week? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Here are the top 10 ASX 200 shares today
• Why Baby Bunting, Brickworks, Core Lithium, and Dreadnought Resources are pushing higher
• Why are these ASX 200 lithium shares smashing it on Monday?
• Why is Core Lithium share price outperforming the ASX 200 today?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Pilbara Minerals Ltd (ASX: PLS) share price has been among the best performers on the ASX 200 index on Wednesday.

In afternoon trade, the lithium miner’s shares are up 6% to $5.10.

Why is the Pilbara Minerals share price storming higher?

There appear to have been a couple of catalysts for the rise in the Pilbara Minerals share price today.

The first is a strong showing in the lithium industry following a positive night of trade for lithium miners on Wall Street.

This has seen fellow lithium shares Allkem Ltd (ASX: AKE) and Core Lithium Ltd (ASX: CXO) also push notably higher on Wednesday.

What else is boosting its shares?

Also giving the Pilbara Minerals share price a boost today has been a broker note out of Macquarie.

According to the note, the broker has retained its outperform rating and $5.70 price target on the company’s shares. This implies potential upside of almost 12% for investors from current levels.

The note reveals that Macquarie was pleased with the company’s latest lithium auction results, which revealed a winning (pre-auction) bid of US$7,100/dmt for 5,000dmt on a 5.5% lithia basis. This is the equivalent of US$7,830/dmt on a 6% lithia basis.

Macquarie is now expecting the ramp up of Pilbara Minerals’ Ngungaju project to allow more regular sales on the online battery material exchange platform.

The post Why is the Pilbara Minerals share price storming 6% higher on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Is it time for ‘cashing in some gains’ on Pilbara Minerals shares?
• 3 ASX 200 companies among the top 10 lithium producers in the world
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• 3 ASX 200 lithium shares that turned a $10,000 investment into $500,000
• Pilbara Minerals share price jumps on strong lithium auction results

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Microsoft (NASDAQ: MSFT) has grown exponentially in its 47 years of business. Despite a recent market downturn, the company’s stock has grown over 200% in the last five years, thanks to the potency of brands such as Xbox, Windows, Azure, and Office. These brands’ success and market share will likely help the company continue growing for years to come.

However, Microsoft’s stock has fallen 29% since January, along with a long list of other tech stocks. Investors who haven’t been able to stay up to date on recent market trends might be perplexed as to why a dominant company like Microsoft has suffered such steep declines in 2022. Let’s find out. 

A beaten-down market

Microsoft has been among the many tech stocks hit by rising inflation and slowing consumer demand in 2022. Even though the company has suffered a 29% decline over the year in its share price, other companies have suffered more. For instance, PC component leaders AMD (NASDAQ: AMD) and Nvidia have seen their stocks fall about 60% in the same period. 

While consumer demand has fallen across various industries as the cost of living continues to rise, the PC market has been one of the hardest hit. According to Gartner, PC shipments fell 19.5% in the third quarter of 2022, with the overall market declining by 17.3%.

Most recently, on 7 October, Microsoft’s stock dipped 4.5% after AMD pre-announced plummeting PC sales for its September quarter. AMD projected revenue of $5.6 billion vs. analysts’ expectations of $6.7 billion, as its client chip sales were down 53% quarter over quarter. The sharp decline for AMD led Microsoft investors to doubt the Windows company’s PC-related business. 

Microsoft’s PC business is reported under its more personal computing segment, which made up 30% of revenue in the company’s fiscal year 2022, which ended 30 June. While Microsoft’s prominence in the PC market has triggered investor concern in 2022, its diversified revenue suggests the company will be better off than other companies in weathering market declines. 

Is Microsoft stock a buy?

In fiscal year 2022, Microsoft’s best-performing segments were its productivity and business processes segment (which include Office and LinkedIn) and intelligent cloud (revenue from Azure). The former made up 31.9% of Microsoft’s revenue in 2022 and saw a rise of 18% year over year, while the latter was responsible for 37.9% of revenue and rose 25%.

Even the company’s more personal computing segment isn’t a total black cloud on the overall business. In addition to Windows and PC revenue, it includes earnings from Microsoft’s Xbox consoles and services, which grew 16% throughout the year. The company may be most known for its influential role in the PC market, but its business has expanded to include far more lucrative markets over the years. 

The cloud market alone was worth $206.5 billion as of Q2 2022, with Microsoft’s Azure having the second biggest market share at 21%. According to Grand View Research, the market will grow at a rate of 15.7% from 2022 to 2030. Moreover, Microsoft’s segment growth of 25% since 2021 proves the lucrative prospects of its operations in this industry.

Additionally, Microsoft’s trailing free cash flow as of 30 June stood at $65.2 billion, matching Alphabet‘s result within a rounding error but trailing Apple‘s $107.6 billion. The Windows company will likely see some form of decline in the next year as fears of a recession grow. However, its varied businesses and free cash flow suggest the company is strong enough to overcome it. 

Microsoft’s decrease of 29% in its share price in 2022 makes it an absolute bargain, considering its long-term prospects. With the company’s substantial market share in promising industries and the funds to carry it through sustained market downturns, an investment in Microsoft is a no-brainer.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Microsoft stock is down 29% this year appeared first on The Motley Fool Australia.

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More reading

• Tough year for leading global growth fund laid bare with brutal fall in tech stocks
• Tech sell-off: These Nasdaq stocks could drop further, but one looks like a screaming buy
• 3 of the top-growing stocks on Earth
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• Why Warren Buffett loves this US stock

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Advanced Micro Devices, Alphabet (A shares), Alphabet (C shares), Apple, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Apple, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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