Category: Stock Market

Core Lithium Ltd (ASX: CXO) shares are charging higher in morning trade, up 5.9%.

The Core Lithium share price closed yesterday at $1.45 and currently stands at $1.53.

With shares in the ASX lithium producer already up a phenomenal 143% in 2022, could there be more growth ahead?

Judging by this new record out of China, that looks quite possible.

Own Core Lithium shares? China just reported record EV sales

The latest figures out from the China Passenger Car Association (CPCA), as reported by Technode, showed that the sales volume of passenger EVs in China hit a record monthly high in June.

The CPCA reported a total of 571,000 EV sales in June, up an eye-popping 141% year on year. For the full calendar year, CPCA is forecasting an 84% increase in EV sales in China, to 5.5 million vehicles.

For some context, that’s about a million more than all the rest of the world’s EV markets combined.

Lithium is a core element in the batteries that make EVs go. And rocketing sales growth in the world’s most populous nation, and second largest economy, could offer some healthy longer-term tailwinds for Core Lithium shares.

Who are the primary producers?

While China is among the world’s leading four lithium producers, Australia tops the list.

In 2020, Australia produced 40,000 tonnes of lithium out of total global production of 82,000 tonnes, according to Geoscience Australia. The government organisation also reported that Australia has a massive economic demonstrated resource of 6.17 million tonnes of lithium.

Those figures also give credence to the outlook for more growth potential ahead for Core Lithium shares.

And if you were wondering, Chile and Argentina round out the list of top producers of the lightweight, highly conductive battery metal.

How have Core Lithium shares been performing longer-term?

Not only has 2022 been a good year, but Core Lithium shares have seriously outperformed longer-term as well.

Over the past five years, the ASX lithium share has rocketed 2,086%. That compares to a 26% five-year gain posted by the All Ordinaries Index (ASX: XAO).

The post What this new Chinese record could mean for Core Lithium shares appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Could this development further energise ASX lithium shares in FY23?
• Why is the Core Lithium share price leaping 10% on Tuesday?

Motley Fool contributor Bernd Struben 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.

What happened

Many investors would have expected Tesla (NASDAQ: TSLA) shares to be sinking today. But the opposite is happening. After an early jump of 5%, Tesla stock was still 3.1% higher as of 1:30 p.m. ET. 

So what

That move was a bit surprising after it was revealed yesterday that CEO Elon Musk sold almost $7 billion worth of his Tesla shares between Aug. 5 and Aug. 9. Musk’s sales came at prices from about $838.5 to $912 per share. 

Now what

While the share sales themselves in no way affect the shareholder value in Tesla, Musk is a widely followed CEO, and his actions — and words — have moved the stock in the past. Musk later addressed his followers on Twitter to say the sales were in preparation for the potential purchase of the social media company. He is in a lawsuit with the company trying to back out of the agreement he previously made for the acquisition. 

But his sale of Tesla stock actually seems prudent in that context. If Musk loses the court case and is forced to acquire Twitter, he may need to come up with liquid capital. By selling some Tesla shares now, he avoids the potential for what he called “an emergency sale of Tesla stock.” 

That likely helped boost investor sentiment with Tesla today. There was other news yesterday that was taken as a positive development. Reuters reported that Tesla sold a little more than 28,000 vehicles from its Shanghai plant in July. While that was a huge drop from the record 78,906 vehicles delivered in June, it wasn’t unexpected. 

July production was heavily impacted by shutdowns related to upgrades that are intended to boost capacity at the critical plant by nearly 30%. The factory should now be able to produce more than 1 million vehicles annually. That’s more important news for Tesla investors who want to see it grow production by at least 50% per year for several more years. And it explains why the stock popped today, despite the news of Musk’s share sales. 

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

The post Why today’s jump in Tesla shares surprised investors appeared first on The Motley Fool Australia.

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More reading

• Elon Musk just sold US$7 billion worth of Tesla shares. What’s going on?
• Why the Tesla share price sank today
• Tesla shareholders approved a 3-for-1 stock split — is the stock a buy?
• Here’s why Tesla stock popped today
• Think you can’t afford to buy Tesla shares? Think again…

Howard Smith 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 Tesla. 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.

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

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

What happened

Shares of most cryptocurrencies and crypto stocks moved higher today after new data showed that inflation might be starting to peak.

Over the last 24 hours, the price of the world’s largest cryptocurrency, Bitcoin (CRYPTO: BTC), traded 4.7% higher as of 10:10 a.m. ET today, while the price of the world’s second-largest cryptocurrency, Ethereum (CRYPTO: ETH), traded 8.7% higher. On the day, shares of the Bitcoin miner CleanSpark (NASDAQ: CLSK) traded almost 15% higher.

So what

All week investors have been waiting for the latest reading of the consumer price index (CPI), which tracks the prices of a range of daily consumer goods and services. This morning, the data showed the index grew 8.5% in July on a year-over-year basis. What’s more, the CPI remained unchanged from June on a seasonally adjusted basis. Both of those numbers came in below expectations and suggest that inflation could have peaked last month.

The decline was led by a 4.6% drop in energy prices from June. Within energy, fuel prices fell 11% and all gasoline prices dropped 7.7%. Transportation services also dropped half a percent from June and the shelter index rose half a percent but at a smaller pace of growth than over the last two months. Furthermore, energy services only grew 0.1% from June after a 3.5% rise in June. Within this category, utility gas service fell by 3.6% in July.

The better-than-expected inflation report could mean that the Federal Reserve’s hawkish policy so far this year is working to tame inflation, which could potentially let the Fed ease up on interest rate hikes as the year progresses. Rate hikes have crushed crypto prices this year with Bitcoin and Ethereum down roughly 50% and 51.4%, respectively. Rising rates make safer assets yield more and put pressure on growth and risk assets. 

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

The post Why Bitcoin and Ethereum are rising today appeared first on The Motley Fool Australia.

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More reading

• Why this Bitcoin maximalist says all other ‘crypto is a scam’
• Why Bitcoin, Ethereum, and Shiba Inu are falling today
• Can the Bitcoin price reach US$30,000 again in 2022?
• Why Bitcoin, Ethereum, and Dogecoin are shooting higher today
• Could this key metric signal more bad news for the Bitcoin price?

Bram Berkowitz has positions in Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. 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.

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

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The Telstra Corporation Ltd (ASX: TLS) share price has been a solid performer on Thursday.

In morning trade, the telco giant’s shares are up almost 2% to $4.08.

Why is the Telstra share price pushing higher?

Investors have been bidding the Telstra share price higher after the company’s full year results impressed the market.

In case you missed it, the company reported a 4.7% year over year decline in revenue to $22,045 million but an 8.4% increase in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to $7,256 million.

As a comparison, a note out of Goldman Sachs reveals that it was expecting underling EBITDA of $7.13 billion and the consensus estimate was $7.17 billion. The company has beaten both estimates, which helps explain why the Telstra share price is having such a good day.

Telstra’s operating earnings growth was underpinned by an impressive performance from its mobile business. It reported EBITDA growth of 21.2% or $700 million thanks to the addition of 155,000 net retail postpaid handheld services, 2.9% postpaid handheld average revenue per user (ARPU) growth, and 6.4% mobile services revenue growth.

Pleasingly, more of the same is expected for Telstra’s underlying EBITDA in FY 2023. Management has provided underlying EBITDA guidance of $7.8 billion to $8.0 billion. This represents a 7.5% to 10% increase year over year.

Dividend surprise

Also giving the Telstra share price a boost today was news that its board has decided to increase its dividend for the first time in seven years.

Telstra will be paying shareholders an 8.5 cents per share fully franked final dividend next month. This is up from 8 cents per share previously and means a full year dividend of 16.5 cents per share.

Telstra’s CEO, Andy Penn, revealed that this increase reflects “the confidence of the Board” and “the recognition by the Board of the importance of the dividend to shareholders.”

I’m not aware of a single broker that was expecting an increase today, so this has been a very pleasant surprise for the market and shareholders.

The post Telstra share price higher on earnings beat and surprise dividend increase appeared first on The Motley Fool Australia.

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More reading

• Telstra share price on watch amid strong FY22 result and surprise dividend increase
• 5 things to watch on the ASX 200 on Thursday
• Here’s the Telstra dividend forecast through to 2024
• ‘Exciting’ ASX 200 dividend share expected to deliver material returns: expert
• ‘Wouldn’t have been on my radar previously’: Why WAM likes Telstra shares 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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. 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 Rio Tinto Limited (ASX: RIO) share price has taken a tumble on Thursday morning.

In early trade, the mining giant’s shares are down 3.5% to $95.67.

Why is the Rio Tinto share price sinking?

The good news for investors is that today’s decline has nothing to do with the company’s performance, the economy, or the price of iron ore.

The weakness in the Rio Tinto share price is actually good news for shareholders. Today’s decline has been driven by the mining giant’s shares trading ex-dividend this morning for its upcoming interim dividend.

This means that if you were on the company’s share register at the close of play on Wednesday, you’ll be in line to receive Rio Tinto’s second highest interim dividend in its history.

Unfortunately, buyers of its shares today and onwards will not be entitled to this dividend. As such, its shares have fallen to reflect this.

What is the Rio Tinto dividend?

At the end of last month, Rio Tinto released its half year results and revealed underlying EBITDA of $15.6 billion.

This allowed the company’s board to declare an interim dividend of 267 US cents per share. This equated to a fully franked $3.837 per share in local currency.

Eligible shareholders can now look forward to being paid this dividend in around six weeks on 22 September.

Based on the Rio Tinto share price at yesterday’s close of $99.18, this represents a yield of approximately 3.9% for investors. And there’s still a final dividend to come early next year!

And given that the Rio Tinto board decided to be conservative with this dividend, that final dividend could be even larger if commodity prices remain solid between now and then.

The post Why is the Rio Tinto share price sinking today? appeared first on The Motley Fool Australia.

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More reading

• Time is running out to secure the Rio Tinto dividend. Here’s what you need to do
• The iron ore price has slumped 10% in 5 days. Here’s how ASX 200 mining shares have responded.
• ‘The world is changing’: CEO reveals what will help drive Rio Tinto shares in 2023 and beyond 
• ‘We are in for the long haul’: Rio Tinto CEO defends future spending in the face of recession fears
• Which ASX 200 shares will prove to be dividend heavyweights this earnings season?

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 AMP Ltd (ASX: AMP) share price is on watch after the bank released its earnings for the first half of 2022 this morning. The embattled financial services stock closed Wednesday’s session at $1.17.

AMP share price in focus on $1.1b capital return

• Underlying after tax profit of $117 million – down 24.5% on that of the prior corresponding period (pcp)
• Cash outflows of $1.9 billion for the half – an improvement on the pcp’s $3.6 billion outflow
• Strong capital position with a $1.5 billion surplus about target level
• It announced a $1.1 billion capital return
• As expected, the bank won’t be offering an interim dividend

AMP said its first half earnings reflect a focus on cost savings to offset margin compression.

AMP’s after-tax profits – when including the sale of the bank’s infrastructure debt platform – came to $481 million – up from $146 million.

It also announced a $1.1 billion capital return today. That will be made up of a $350 million on-market buyback, starting immediately.

It’s planning to return another $750 million in financial year 2023 through a combination of capital return, special dividend, or further buyback, subject to regulatory and shareholder approval.

AMP Bank’s residential mortgage book grew at 1.15 times system last half while its net interest margin (NIM) fell to 1.32%. The division reported $46 million of underlying profits – a 45.2% drop.

Finally, the company’s Australian Wealth Management division ended the period with $126.3 billion of assets under management (AUM), down from $142.3 billion at the end of financial year 2021. The drop was primarily due to negative market returns.

AMP Capital’s continuing operations were the only division to boast higher profits last half, bringing in $26 million – a 62.5% increase.

What else happened in the first half?

The major news from AMP last half was of the sale of its Collimate Capital businesses.

It agreed to sell the Collimate Capital real estate and domestic infrastructure business to Dexus Property Group (ASX: DXS) for $250 million cash upfront and up to $300 million in potential earn-outs on 27 April.

A quick aside; that potential $300 million payday was dropped to a maximum of $75 million when AMP lost control of the AMP Capital Wholesale Office Fud last month.  

The company announced the other half of Collimate Capital – its international equity business – will be picked up by digital infrastructure firm DigitalBridge for up to $699 million on 28 April.

The AMP share price rose 12.6% over the two days in which it announced the sales.

What did management say?

AMP CEO Alexis George commented on the company’s half year results, saying:

The first half of the year has seen a challenging economic backdrop. Despite the decline in investment markets, our business is well positioned with a robust balance sheet that will help us to drive forward through a period of continued economic uncertainty.

While our profit has declined … due to a more challenging environment, it is also a reflection of the deliberate actions we took to … continue delivering competitive offers to customers and set AMP up for longer-term success.

What’s next?

AMP said the current macroeconomic environment will likely bring more challenging business conditions.

Its banking division is targeting a NIM of between 1.35% and 1.4% in financial year 2022. Its NIM improved in the second quarter. It’s expected to continue growing in the second half due to higher interest rates.

It will also renew its focus on building AMP as a leading wealth management and banking business in Australia and New Zealand after the Collimate Capital businesses’ sales are completed in the current half.

AMP share price snapshot

The AMP share price outperformed in the six months ended 30 June.

It fell around 3% over the half year while the S&P/ASX 200 Index (ASX: XJO) dumped approximately 12%.

Looking longer-term, the stock has lifted 8% in the last 12 months while the index has slumped 8%.

However, the AMP share price is still trading 77% lower than it was five years ago.

The post AMP share price in focus amid falling profits and $1.1b capital return appeared first on The Motley Fool Australia.

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More reading

• Are AMP shareholders heading for a $1 billion pay day?
• Here are the top 10 ASX 200 shares today
• Up 13% in July, can the AMP share price maintain its momentum?
• Here’s the good news about bear markets
• The AMP share price has surged 9% so far this month. Can it keep going?

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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What an impressive year it has been for the AGL Energy Ltd (ASX: AGL) share price.

Since the beginning of 2022, the energy company’s shares have roared to life before settling around the mid-$8 mark.

Over the past eight months, the AGL share price is up almost 40%, outstripping the S&P/ASX 200 Energy (ASX: XEJ) sector.

For context, the benchmark index comprising 11 of the top 200 companies has risen 27% in 2022.

Even with the robust gains recently, let’s take a look at how much AGL has paid in dividends since 2017.

What is AGL’s dividend history?

Below, we take a look at the past five years’ worth of dividends that AGL has distributed to shareholders.

• September 2017 – 50 cents (final)

• March 2018 – 54 cents (interim)

• September 2018 – 63 cents (final)

• March 2019 – 55 cents (interim)

• September 2019 – 64 cents (final)

• March 2020 – 47 cents (interim)

• September 2020 – 51 cents (final)

• March 2021 – 41 cents (interim)

• September 2021 – 34 cents (final)

• March 2022 – 16 cents (interim).

Calculating the above AGL dividends since September 2017 gives us a total figure of $4.75 for every share owned.

Although the dividends represent more than 55% of the current share price, AGL shares were trading at around $24 five years ago. This is why the dividends are much higher towards the start of the period.

It is worth pointing out that AGL dividends were originally 80% franked but since 2021, they’ve been unfranked.

AGL share price snapshot

Despite tumbling over the long term, the AGL share price has gained around 13% in the past 12 months.

The company’s shares hit an all-time low of $5.10 on 16 November before bargain hunters swooped in. It’s up 68% since that time.

AGL is one of Australia’s oldest energy providers and is valued at $5.7 billion.

The company currently offers a healthy dividend yield of 5.83%.

The post Guess how much AGL has paid in dividends over the past 5 years? appeared first on The Motley Fool Australia.

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More reading

• AGL share price down amid Fortescue Future Industries hydrogen hub news
• Why was the AGL share price undercooked in July?
• ‘Massive untapped demand’: The $3 trillion opportunity ASX 200 energy shares could be missing
• Can the AGL dividend bounce back this earnings season?
• What’s been impacting the AGL share price this week?

Motley Fool contributor Aaron Teboneras 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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2022 has been an extremely volatile year for a number of ASX shares. Are the lower prices of businesses that are burning cash too attractive to ignore? Or are they too risky?

There are plenty of businesses that have seen big falls.

At the time of writing, before Thursday’s trading, these are some examples of the falls we’ve seen in 2022:

The RPMGlobal Holdings Ltd (ASX: RUL) share price has dropped 23%.

The Whispir Ltd (ASX: WSP) share price has declined 53%.

The Bigtincan Holdings Ltd (ASX: BTH) share price has fallen 31%.

Of course, every fall is different and each investor may have a different thought about why they sold (or bought) at a lower price.

However, some investors may be thinking it’s possible that some of these unloved names could have been oversold. Only time will tell for sure, but let’s take into account some thoughts from some expert investors on the situation.

Forager is a fund manager that has a reputation for often finding sold-off opportunities.

The Forager Australian Shares Fund (ASX: FOR) investment team recently gave some comments discussing the types of companies the fund is currently invested in:

On the current portfolio and RPMGlobal

Forager senior analyst Alex Shevelev said:

Some of these investments are in businesses that are currently loss-making. And you might be asking why a value biased fund manager is investing in companies that are loss-making. Well, we’ve actually had quite a bit of success in this space over the last 10 years of the existence of the fund.  Jumbo Interactive Ltd (ASX: JIN) a couple of years back was a great example [and] RPM is a good more recent example. These companies are frequently misunderstood, and it’s exactly because of that short-term lack of profitability that the companies can sometimes build up significant long-term value.

On Whispir

The Forager analysts pointed out to investors that the ASX shares they are interested in have proven business models. They have a proven product that “solve real customer needs and that already generate decent and growing amount of revenue.”

Forager senior analyst Gaston Amoros said this about one of the holdings:

Just to give you an example, Whispir already caters to some very large customers and if clearly addressing need to manage communications with customers and employees more efficiently and effectively.

What about Bigtincan?

Shevelev gave further comments on the types of ASX shares they’re looking at and another holding:

There’s also a lot of recurring revenue in these businesses. Now, customers tend to stay very sticky to these products. They’re often mission critical and they’re very difficult to rip out and replace with competitive products. So, a company like Bigtincan, for example, the sales enablement business, they have the vast majority of their customers from the prior year stay with them.

Foolish takeaway

So, it’d probably be wise to think individually about each business that has been sold off. But, ASX shares that have proven business models, have loyal customers, are making revenue and address a key need could be interesting to look at in this environment according to the investment thoughts of Forager.

The post Loss-making ASX shares: Big investment opportunity or extreme risk? appeared first on The Motley Fool Australia.

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More reading

• Why is the Whispir share price tumbling 10% on Monday?
• ‘Great long-term investment’: Expert names small-cap ASX share to buy for cheap

Motley Fool contributor Tristan Harrison 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 BIGTINCAN FPO, RPMGlobal Holdings, and Whispir Ltd. The Motley Fool Australia has positions in and has recommended BIGTINCAN FPO. The Motley Fool Australia has recommended RPMGlobal Holdings and Whispir Ltd. 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 Woodside Energy Group Ltd (ASX: WDS) share price has been volatile over the past 12 months. Amid the rollercoaster of the ASX share market in the last few months, was it a good move to acquire the BHP Group Ltd (ASX: BHP) oil and gas business?

For readers who don’t know, Woodside is the largest oil and gas company on the ASX. It became a lot larger after merging with the BHP petroleum division and issuing BHP shareholders with new Woodside shares.

The merger

When it announced the acquisition back in November 2021, Woodside boasted that the combined business would create a global top 10 independent energy company by production.

It said that the combination will lead to a business that has a high margin oil portfolio, long-life LNG assets, and the financial resilience to help supply the energy needed for global growth and development over the energy transition.

Greater scale is one obvious benefit. But, Woodside has also estimated that there will be synergies of more than US$400 million per annum from optimising corporate processes and systems, leveraging combined capabilities, and improving capital efficiency on future growth projects and exploration.

How has the Woodside share price performed?

The merger was completed at the start of June 2022. Since then, the Woodside share price has risen by around 5%.

Over the same time period, the S&P/ASX 200 Index (ASX: XJO) share price has dropped more than 3%. In other words, Woodside shares have outperformed the ASX 200 by almost 10% since the merger happened. That’s quite a bit of outperformance over a relatively short period of time.

However, the merger wasn’t a surprise in June 2022. Investors have known about it since November 2021. Since the announcement of the merger, the Woodside share price has risen by 44%. That compares to a 5.5% drop for the ASX 200. Woodside shares have outperformed by around 50%.

However, it’s hard to say how much is down to Woodside’s merger with the BHP division and how much is down to the huge jump in energy prices after the Russian invasion of Ukraine.

But, don’t forget that Woodside will get a few hundred million dollars of synergies. It’s not just about the revenue boost.

Woodside CEO Meg O’Neill said:

The merger delivers a diverse portfolio of quality operating assets, plus a suite of growth opportunities across oil, gas and new energy that promises ongoing value for our shareholders.

We believe that completion of the merger will enable Woodside to play a more significant role in the energy transition that is imperative as we respond to climate change while ensuring reliable and affordable supplies of energy to a growing and aspirational global population.

Woodside dividend expectations

According to estimates on CMC Markets, Woodside is expected to pay a grossed-up dividend yield of 16.2% in FY22.

Woodside will reveal its full-year results for FY22 on 30 August.

The post Has the BHP Petroleum acquisition been positive for the Woodside share price? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison 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.

The Nasdaq Composite Index (NASDAQ: .IXIC) is cranking on August 10, 2022, up 2.4% at 12:53 p.m. Today’s big gains come as earnings season continues and following the release of the latest inflation data from the U.S. Department of Labor this morning. According to the data, the Consumer Price Index, or CPI, rose 8.5% in July. For context, that’s still near the highest levels of the past four decades, but it’s trending very much in the right direction after June’s 9.1% set a 41-year high.

Today, investors are betting that slowing inflation is a good signal that a sharp recession is less likely. Energy and food prices are moderating, and many companies are still reporting upbeat quarterly results and expectations. Upstart (NASDAQ: UPST) and Affirm Holdings (NASDAQ: AFRM) are at the leading edge of that consumer risk, and their highly volatile stocks are up big today on the optimistic reading of the inflation data.

Today’s noteworthy postearnings gainers include The Trade Desk (NASDAQ: TTD), with shares up more than 36% at one point. Investors are also betting on better prospects for renewable and low-carbon energy companies. Shoals Technologies (NASDAQ: SHLS) and Plug Power (NASDAQ: PLUG) are two of those up big today.

When near-record inflation is a “good” thing

While the CPI is still very high, today’s interpretation of the data was generally positive. We have seen energy and food prices begin to come down, and some areas of the global supply chain crisis are improving, too. Semiconductor companies, in particular, are reporting that the cycle in that industry is turning from too much demand to too much supply in certain product categories. While that’s not a positive for shareholders in the short term, it’s positive for the broader economy that the supply shortfall that’s kept many products off the shelves and prices very high might be starting to ease.

Investors see this as very positive for Upstart, the AI-driven consumer lending platform, and for buy now, pay later specialist Affirm Holdings, with their shares up 16% and 13%, respectively, at this writing. Both companies live at the leading edge of consumer credit risk. By and large, the bulk of their lending products are unsecured consumer debt (though Upstart is diversifying into auto lending), which is the first kind of credit to see increased rates of default in weak economic periods. However, today’s gains could prove temporary, as both saw their stocks fall sharply earlier this week on earnings and economic speculation.

The Trade Desk’s second quarter was, by almost every measure, exceedingly strong. It reported 35% revenue growth, continued to retain more than 95% of its customers, and more than doubled its operating cash flows. If there’s one not-great number, it’s stock-based compensation, which almost tripled year over year and was the primary factor in The Trade Desk reporting a GAAP loss.

What happens next? Plenty of volatility as investors try to telegraph what happens in the near term. Investors in both companies should be prepared for that and acknowledge that their risks will be amplified if consumers continue to get squeezed. The companies’ long-term prospects, however, are tied to their ability to keep disrupting the traditional credit card and consumer lending industries.

The Trade Desk shakes off earnings woes for adtech

The Trade Desk’s results were a breath of fresh air for the adtech industry. In recent weeks, many of the companies that are deeply involved in the growing digital ad industry have reported somewhat mixed results. The mature giants like Facebook parent Meta Platforms (NASDAQ: META) have reported strong ad volume but falling ad rates, as marketers have cut ad spending.

Investors seem happy to trade a portion of equity to co-founder and CEO Jeff Green, however, as part of his compensation. Shares are up a massive 36% at this writing.

Cleantech stocks cleaning up today — can they keep it up?

The stocks of a number of clean energy companies are up big today. Shares of Shoals Technologies, which makes electrical wiring for utility-scale solar plants, are up 14% today, joining hydrogen companies Plug Power and Bloom Energy (NYSE: BE). The latter’s shares are up more than 15% after Bloom reported expectations-beating earnings and said it expects to be cash flow positive for the full year.

Plug Power reported on August 9. Unlike Bloom, its results came up short of expectations. However, analysts continued to have bullish outlooks, raising their price targets on the company, partly due to the expected tailwinds of the recently passed landmark federal climate legislation.

Looking beyond near-term price targets and potential tailwinds from the new climate law, investors should focus on the financials. Plug Power has a very long record of cash burn (it has never had a positive-cash-flow year in its multidecade history), while Shoals and Bloom have demonstrated positive cash flows in the past and are trending in positive directions.

Optimistic thinking is nice, but as investors, we mustn’t forget that long-term wealth comes from a healthy — growing — bottom line.

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

The post Nasdaq surges after inflation data: Why the top tech and growth stocks moved higher appeared first on The Motley Fool Australia.

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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. Jason Hall has positions in Bloom Energy Corp, The Trade Desk, and Upstart Holdings, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Affirm Holdings, Inc., Meta Platforms, Inc., The Trade Desk, and Upstart Holdings, Inc. The Motley Fool Australia has recommended Meta Platforms, Inc., The Trade Desk, and Upstart Holdings, Inc. 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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