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S&P/ASX 200 Index (ASX: XJO) lithium shares are getting hammered today.

The ASX 200 is down 0.4% in early afternoon trade, with materials shares broadly lagging, as witnessed by the 1.7% decline in the S&P/ASX 200 Materials Index (ASX: XMJ).

But the top ASX lithium stocks by market cap are all having a much worse time of it.

At the time of writing:

• Core Lithium Ltd (ASX: CXO) shares are down 14.2%
• Allkem Ltd (ASX: AKE) shares are down 12.9%
• Pilbara Minerals Ltd (ASX: PLS) shares are down 9.9%
• IGO Ltd (ASX: IGO) shares are down 6.5%

Ouch!

So, why are ASX 200 lithium shares feeling the pressure today?

What’s going on with ASX 200 lithium shares?

Part of the selling pressure comes following a weak performance on US markets yesterday (overnight Aussie time).

While the S&P 500 Index (SP: .INX) closed down 0.9%, major US lithium stocks, including Albemarle Corporation (NYSE: ALB) and Livent Corp (NYSE: LTHM), dropped significantly more.

But we suspect more of the selling action we’re seeing with ASX 200 lithium shares today stems from a potential reversal in sentiment that was witnessed during Monday’s trading. A day that saw Core Lithium shares leap 11.7% by the closing bell.

Though Pilbara Minerals is a notable exception here. Despite trading 4.3% higher earlier in the day on Monday, Pilbara closed down 1.5% yesterday.

As for Monday’s more bullish sentiment, that appears to have been driven by news out of China that authorities are rolling back some of the stricter aspects of the nation’s COVID-zero policies.

China, a voracious consumer of lithium for its booming electric vehicle markets, has seen its economic growth hampered by rolling lockdowns in an effort to stamp out the virus. Any move by the Middle Kingdom to reopen will likely spur greater demand for a range of resources, including lithium.

Today, however, investors may be rethinking the timeline on China’s reopening. This comes amid reports of surging COVID cases. Data released overnight revealed that Sunday marked the fourth consecutive day with more than 10,000 new cases reported inside the nation.

That may test Chinese authorities’ resolve to loosen restrictions. And it looks to be throwing up some headwinds for ASX 200 lithium shares today.

How have these top lithium stocks performed in 2022?

Despite today’s falls, all the ASX 200 lithium shares named above are still well into the green this calendar year.

While the benchmark index itself is down 6% in 2022, the Allkem share price is up 27%, IGO shares have gained 29%, the Pilbara Minerals share price has leapt 35% higher, and the Core Lithium share price is up 154% year to date.

The post Why are ASX 200 lithium shares hitting the dirt on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• Why is the Pilbara Minerals share price tumbling 10% on Tuesday?
• Why is the Core Lithium share price falling 12% on Tuesday?
• Why is the Allkem share price crashing 10% today?
• ‘No stress’: Experts name 2 ASX shares to buy for strong long-term growth
• Why did ASX lithium shares have a dream run on Monday?

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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The Incitec Pivot Ltd (ASX: IPL) share price is having a strong day.

In afternoon trade, the agricultural chemicals company’s shares are up 8% to $4.04.

This compares very favourably to the ASX 200 index, which is down 0.45% at the time of writing.

Why is the Incitec Pivot share price storming higher?

Investors have been buying the company’s shares after responding positively to its full year results release this morning.

For the 12 months ended 30 September, Incitec Pivot reported a 186% increase in net profit after tax excluding individually material items (IMIs) to a record $1,027 million.

The Dyno Nobel Americas business was the star of the show, reporting EBIT of US$533 million, which was up from US$141 million a year earlier. Management advised that this was driven by continued uptake of premium technology underpinning excellent volume growth in Q&C, as well as a strong second half manufacturing performance capturing favourable commodity markets

Dyno Nobel Asia Pacific business delivered EBIT of $162 million, up from $140 million in FY 2021. This reflects customer growth and solid take up of Dyno’s premium technology solutions

Finally, Fertilisers EBIT more than doubled to $614 million. Management notes that this was underpinned by its unrivalled distribution platform and manufacturing footprint, which provided customers security of supply.

Big shareholder returns

In light of this strong form, the company’s board has declared a fully franked final dividend of 17 cents per share. This brings the total dividends to 27 cents per share for FY 2022.

But it gets better. An on-market share buyback of up to $400 million has been approved to be conducted over the next 12 months.

In other news, the aforementioned fertilisers business demerger has been delayed for up to a year following the receipt of “unsolicited approaches in relation to the potential acquisition of its ammonia manufacturing facility located in Waggaman, Louisiana.”

Management is now undertaking a review of the strategic options for Waggaman.

Broker reaction

Goldman Sachs has reacted positively to Incitec Pivot’s full year results. It said:

FY22 Adj NPAT of $1,027m was up 8% vs GSe and up 3% vs Visible Alpha Consensus (A$948m/A$993m). […] The biggest variance was in North America where lower than expected explosives earnings were more than offset but higher WALA and Ag & IC earnings.

IPL announced a $400m on market buyback. While we had anticipated strong cash generation (providing scope for capital management), this announcement was sooner than expected given the proposed demerger.

Goldman currently has a buy rating and $4.40 price target on Incitec Pivot’s shares. Though, that could change once it has adjusted its financial model.

The post ASX 200 chemicals giant Incitec Pivot leaps 8% on record year and share buyback news appeared first on The Motley Fool Australia.

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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 is plummeting on Tuesday despite no word having been released by the company.

Right now, stock in the lithium favourite is down 10.02%, trading at $4.76. That’s a slight improvement on its intraday low.

The Pilbara Minerals share price bottomed out at $4.60 earlier today, marking a 13% tumble and its lowest point in nearly a month.

For comparison, the S&P/ASX 200 Index (ASX: XJO) is down 0.34% right now, while the S&P/ASX 200 Materials Index (ASX: XMJ) is proving to be its biggest weight, falling 1.72%.

Let’s take a closer look at what might be going wrong for the ASX lithium share today.

What’s dragging the Pilbara Minerals share price lower?

The Pilbara Minerals share price is among the ASX 200’s worst performers on Tuesday, only outperforming some of its fellow lithium stocks.

Joining it in the red are shares in Core Lithium Ltd (ASX: CXO) and Allkem Ltd (ASX: AKE). They’re down 13.94% and 12.33% respectively right now.

Some of their tumble might be chalked up to an international lithium sell-off.

Stock in many of the globe’s most recognisable lithium players, such as Albemarle Corporation (NYSE: ALB), Livent Corp (NYSE: LTHM), and Sociedad Quimica y Minera de Chile (NYSE: SQM), slipped between 2.8% and 5.3% overnight.

Though, the trio each reached their highest closing price in more than a month on Friday, potentially helped along by optimistic US inflation data. Thus, their falls may have represented profit-taking.

Additionally, Wall Street struggled overnight, with the Dow Jones Industrial Average Index (DJX: .DJI) slipping 0.6% and the S&P 500 Index (SP: .INX) falling 0.9%.

Interestingly, there has been a non-price-sensitive release from Pilbara Minerals. The company revealed AustralianSuper has ditched its previously-held 5% stake in its stock after the market closed last night.

Additionally, lithium shares might be front of mind amid Allkem’s annual general meeting, held this morning, as my colleague James reports.

Fortunately, the Pilbara Minerals share price still has a long way to go before it will reach the long-term red. The stock has soared 34% year to date and more than 90% over the last 12 months.

The post Why is the Pilbara Minerals share price tumbling 10% on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• Building a passive income for retirement? Check out these 3 ASX 200 dividend shares
• Up 20% in a month, here’s the bull and bear case for the Lynas share price
• Why did ASX lithium shares have a dream run on Monday?
• Here are the top 10 ASX 200 shares today
• Why did the AGL share price lag the ASX 200 on Monday?

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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It has been a tough 12 months for tech stocks, with the S&P/ASX All Technology Index (ASX: XTX) losing 35% as sharply higher interest rates take their toll on the sector.

Notable losers have been the Megaport Ltd (ASX: MP1) share price losing 71% over the past 12 months, and the Xero Limited (ASX: XRO) share price down 53%.

Although still sporting a negative return since this time last year, the RPM Global Holdings Ltd (ASX: RUL) share price has only fallen 12%.

RPM Global provides advisory consulting, technology and professional development solutions to the mining industry. Think of it as a “picks and shovel” play, a company seeking to benefit from the mining sector no matter which company or which mineral is “winning.”

RPM Global shares had a strong October, its share price rising 25%. Late in the month, at its AGM, the company’s stand-in Chairman confirmed it has started the 2023 financial year strongly, reconfirming its guidance for the full year of revenue of $101 million and EBITDA of $14.2 million.

The RPM Global share price trades at $1.88, giving the company a market capitalisation of $432 million. 

Writing in its October monthly update, the Ellerston Australian Micro Cap Fund noted RPM Global’s guidance was a significant increase on the prior year.

The fund believes RPM Global is well placed to benefit from the continued digitisation of mine sites and the increased penetration of its software across its key customers globally. It names global resource leaders such as Rio Tinto Limited (ASX: RIO) and BHP Group Ltd (ASX: BHP) amongst its diversified client base.

The Ellerston Australian Micro Cap Fund concluded…

“The group continues to be a stand-out in the technology sector, with a combination of strong top-line growth and operating leverage, as well as the announced buy-back underway.”

Whilst not cheap, trading at over four times sales and over 30 times EBITDA, as a software business, RPM Global has strong recurring revenue and expanding profit margins. 

In helping mining companies manage a mine site in the most optimal way over its expected useful life, the company offers a mission critical service. This should make it near impossible for its customers to give up, providing highly sticky recurring revenues for years to come. 

The post Fund manager names this ASX All Ordinaries stock as ‘a stand-out’ in the technology sector appeared first on The Motley Fool Australia.

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• Triple-digit growth: 2 ASX shares Elvest is investing in for the long haul
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Motley Fool contributor Bruce Jackson has positions in RPMGlobal Holdings and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended MEGAPORT FPO, RPMGlobal Holdings, and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended MEGAPORT FPO and RPMGlobal Holdings. 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.

After months of hinting at job cuts, Amazon (NASDAQ: AMZN) just dropped the ax.

The tech giant is planning to lay off roughly 10,000 people in its white-collar workforce, or around 3% of the total, according to The New York Times. The layoffs will target Amazon’s devices business, which includes Alexa, as well as retail and human resources. The stock was down modestly on Monday, which was a notable contrast to fellow FAANG stock Meta Platforms, which jumped last week when its layoffs were revealed.

This will be the first round of major job cuts in Amazon’s history. They’re the upshot of both a slowdown in the broader economy and an overexpansion during the pandemic that led the company to hire and open new warehouses too aggressively. As the pandemic tailwinds have faded, Amazon has been forced to reassess its cost strucuture, especially as it forecast just 2%-8% revenue growth in the holiday quarter and after it lost more than $8 billion in its e-commerce divisions through the first three quarters of this year.

A changing of the guard

The news of the layoffs, which Amazon hasn’t officially confirmed, and its guidance calling for its slowest revenue growth in 20 years show the company is entering a new, more mature, stage of life, especially as its revenue is set to top $500 billion this year. 

Founder Jeff Bezos, who yielded the top job to CEO Andy Jassy last July, has made “Day One” central to the culture at Amazon. Day One means that employees are to treat the company like a start-up, experimenting, being bold, and, above all, avoiding stasis.  

But a 27-year-old company that dominates industries from e-commerce to cloud computing to books isn’t a start-up, and it has problems that a start-up doesn’t have, like billions of dollars in waste. Not all of Amazon’s experiments are going to pay off, and even a company that has famously embraced failure must eventually cut its losses.

Jassy may be quicker to pull the trigger on cost cuts than Bezos was, and it’s notable that Alexa is included on the hit list. The voice-activated technology was a pet project of Bezos’s, and at one point, he believed that Alexa could become Amazon’s “fourth pillar,” after its retail marketplace, Prime, and Amazon Web Services. However, it’s been eight years since Amazon launched Alexa, and the voice-activated tech has largely been a disappointment. Amazon has struggled to monetize Alexa beyond selling Echo devices at or near cost, and predictions that voice-activated tech would replace conventional internet search or even online shopping have fallen flat. According to The Times, Amazon lost $5 billion on Echo and Alexa in 2018.

What the layoffs mean for Amazon stock

Amazon hasn’t made an official announcement on the layoffs so the details aren’t yet clear. The move is likely to result in cost savings of at least $1 billion. However, cutting expenses by $1 billion or even $2 billion is unlikely to move the needle for the stock. Investors’ lack of reaction to the news shows that Amazon will need to do more to restore profitability and drive a rebound in the stock.

Through the first three quarters of 2021, the company made an $8.1 billion profit in e-commerce. In other words, year-over-year, it lost $16.2 billion in profits in e-commerce, which has crushed its bottom line. That also shows there’s significant opportunity for improvement. 

That business should eventually recover as macroeconomic headwinds fade and it grows into fixed costs like its warehouses, but it’s clear that the company has a lot of fat to trim, and layoffs are just one step in that process. Its international business regularly loses billions of dollars a year, and Amazon may be considering whether to pull out of countries where it isn’t profitable and might never be.

Investors can live with slower growth on the top line if it means restoring profitability to 2021 levels, and Amazon should be able to get back there, though it will take at least a few quarters. In the meantime, expect Jassy and the leadership team to fine-tune the business so that it’s investing in profitable opportunities rather than burning cash on frivolous experiments.

With the focus on cost-cutting, investors should expect a more profitable Amazon in the future, and that’s a good reason to bet on a rebound in the stock.

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

The post Amazon is set for major layoffs. Here’s what it means for the stock appeared first on The Motley Fool Australia.

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Jeremy Bowman has positions in Amazon and Meta Platforms, Inc. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Meta Platforms, Inc., and The New York Times. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: short January 2023 $34 calls on The New York Times. The Motley Fool Australia has recommended Amazon and Meta Platforms, 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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The Sayona Mining Ltd (ASX: SYA) share price is struggling today amid the announcement of a new strategic acquisition by the emerging lithium producer.

Sayona shares are down 6.92% and are currently trading at 24.2 cents each. For perspective, the S&P/ASX 200 (ASX: XJO) is 0.37% in the red today.

Let’s take a look at what is going on with the Sayona Mining share price.

Lithium shares struggle

Sayona Mining is not falling as much as some of its ASX lithium share peers today. The Core Lithium Ltd (ASX: CXO) share price is sinking nearly 17%, while Allkem Ltd (ASX: AKE) shares are descending by 13%. The Pilbara Minerals Ltd (ASX: PLS) share price is down 11%.

Meanwhile, the S&P/ASX 200 Materials Index (ASX: XMJ) is 2.06% in the red today. This follows a similar trend in US markets overnight.

The Livent Corp (NYSE: LTHM) share price slipped 4.16% on Monday in the US, while Sociedad Quimica y Minera de Chile (NYSE: SQM) shares descended 5.3%. Albemarle Corporation (NYSE: ALB) shares fell 2.78%.

Investors in Australia also may be selling off some of their gains today after ASX lithium shares had a top run on Monday.

Today, Sayona Mining advised of a new strategic acquisition after the market closed on Monday. Sayona subsidiary North American Lithium (NAL) has entered an earn-in agreement with Jourdan Resources (TSXV: JOR) related to the Vallee Lithium Project in Quebec.

Under the deal, NAL will acquire 20 claims (out of a total of 48 spanning 1,997 hectares) with a right to earn a 51% stake in the remaining 28 claims of the project.

By spending C$4 million on exploration, NAL can gain a 25% stake in the project, while up to 51% interest can be attained by spending C$10 million in a two-year period.

Commenting on today’s news, Sayona Mining managing director Brett Lynch said:

Sayona continues to pursue opportunities for expansion and this is an excellent opportunity to swiftly expand NAL’s potential resource base, paving the way for an increase in NAL’s future mine production capacity.

Sayona Mining share price snapshot

The Sayona Mining share price has soared nearly 47% in the past year while it has surged 87% year to date.

For perspective, the ASX 200 has fallen 4.5% in the past year.

Sayona has a market capitalisation of more than $2 billion based on the current share price.

The post Sayona Mining share price slides 7% despite acquisition news appeared first on The Motley Fool Australia.

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More reading

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Motley Fool contributor Monica O’Shea 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 AGL Energy Limited (ASX: AGL) share price popped then dropped on Tuesday amid news all four of Mike Cannon-Brookes’ nominees have been elected to the company’s board.

The win is in defiance of the majority of the board’s recommendations.

It also marks the activist shareholder and billionaire’s second major victory against the energy giant. Cannon-Brookes famously led a campaign against AGL’s ultimately scrapped demerger plan in May.

The AGL share price turned an earlier tumble into a gain this morning. The stock plunged 0.5% to $7.66 in early trade before leaping 0.65% to $7.75 shortly after today’s release.

However, at the time of writing, the AGL share price has slipped back into the red. It’s now trading at $7.675, 0.32% lower than its previous close.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 0.4%. The S&P/ASX 200 Utilities Index (ASX: XUJ) has also fallen 0.08%.

Let’s take a closer look at the win chalked up by newly instated AGL directors Mark Twidell, Dr Kerry Schott, Christine Holman, and John Pollaers.  

All 4 Cannon-Brookes nominees appointed to AGL board

Atlassian Corp (NASDAQ: TEAM) co-founder and co-CEO Cannon-Brookes has won another battle against the AGL board, the company’s chair Patricia McKenzie revealed at its annual general meeting (AGM) today.

All four nominees Cannon-Brookes’ investment vehicle Grok Ventures put forward to the company’s board were elected based on proxies lodged ahead of the meeting. Of the newly appointed directors, only Twidell was endorsed by the board.

McKenzie commented today:

The board welcomes these new directors … and will work constructively with them in the best of interests of shareholders.

She also revealed AGL will likely receive a ‘first strike’ on its remuneration report after “a couple of large shareholders voted against it”. McKenzie continued:

This is a disappointing result given that all major proxy advisors recommended that shareholders vote in favour of the report and no material concerns were identified.

However, we will take this outcome into account when we review our remuneration structure during FY23 to consider opportunities to further align the structure with company performance and long-term shareholder value.

A first strike occurs when more than 25% of shareholders vote against a remuneration report.

Looking more broadly, the AGL chair recognised what was “a difficult year for AGL”. 

However, the company’s board is said to be confident it can move forward with “the right strategy … to deliver reliability and affordability of the NEM, value to shareholders, and an accelerated decarbonisation pathway.”

AGL recently revealed a renewed strategy that would see it ditching coal by 2036 – a decade earlier than planned. The plan could see the company forking out $20 billion for new generation and firming capacity between now and then.

AGL share price snapshot

Despite today’s slump, the AGL share price has been performing well recently.

The stock has gained 22% since the start of this year. It’s also currently 46% higher than it was this time last year. Though, looking further back, the AGL share price has dumped 69% over the last five years.

Comparatively, the ASX 200 has fallen 6% year to date and 4% over the last 12 months. It’s 20% higher than it was in November 2017.

The post AGL share price slips amid Cannon-Brookes’ board victory appeared first on The Motley Fool Australia.

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More reading

• Building a passive income for retirement? Check out these 3 ASX 200 dividend shares
• Up 20% in a month, here’s the bull and bear case for the Lynas share price
• Here are the top 10 ASX 200 shares today
• Why did the AGL share price lag the ASX 200 on Monday?
• Here are the 3 most traded ASX 200 shares on Monday

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 positions in and has recommended Atlassian. 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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A little-known ASX gold share is setting the bar high today.

While the All Ordinaries Index (ASX: XAO) is down 0.2% heading into the lunch hour, this gold stock junior leapt 77.7% in early trade and is currently up 58.3% from yesterday’s close.

The big move higher doesn’t come after the ASX gold share struck a rich vein of the yellow metal, but rather a significant rare earth element (REE) announcement.

Any guesses on which explorer we’re talking about?

If you said Victory Goldfields Ltd (ASX: 1VG), give yourself a gold star.

What REE discovery did the ASX gold share report?

The Victory Goldfields share price is rocketing after the company announced promising initial results from its 118 hole air core (AC) drill campaign at its North Stanmore REE project, located in Western Australia.

The results revealed “significant” REE was confirmed up to 4 kilometres from the explorer’s initial discovery.

The ASX gold share said the assays returned Heavy Rare Earth Oxide (HREO) enriched with a HREO/TREO ratio of 34%. The company noted this could be up to 350% more valuable compared to Light Rare Earth Oxide (LREO) hard rock deposits.

Scandium – used to manufacture the alloys in fighter jets as well as in hydrogen fuel cells – in the latest assays exceeded global economic grades.

Commenting on the results sending the ASX gold share rocketing higher today, Victory Goldfields’ executive director Brendan Clark said:

Rare Earth Element grades and critical metal ratios at this level, potentially make the discovery one of the most valuable ionic clay hosted rare earth systems compared to our peers based on our high basket price…

The North Stanmore discovery also benefits from direct access to the Great Northern Highway and close proximity to Perth and the Geraldton Port, making the discovery a market leader for its logistical advantages.

The explorer intends to immediately kick off another 10,000 metres of AC drilling and has appointed RSC Mining & Mineral Exploration to commence a (JORC) Mineral Resource Estimate.

Victory Goldfields share price snapshot

The ASX gold share is a relative newcomer to the exchange, having listed on 22 July 2021.

With today’s big intraday lift factored in, the Victory Goldfields share price is up 43% in 2022. That compares to an 8% calendar year loss posted by the All Ordinaries.

The post Guess which ASX gold share just exploded 70% on a new rare earths find appeared first on The Motley Fool Australia.

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More reading

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• Guess which ASX tech share just rocketed 60% on takeover news
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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.

The stock market hasn’t been an ideal place for investors to park their money in 2022 as major indices such as the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite are all in the red this year thanks to factors including a hawkish Federal Reserve, high inflation, and macroeconomic headwinds. But investors shouldn’t forget that the stock market gives investors one of the best avenues to increase their wealth in the long run.

The average stock market return has been solid over the years and now may be a good time for investors to pick up some top stocks that have witnessed a brutal sell-off in 2022. If you have $500 to spare right now — you don’t need the money in the next few years, your high-interest debt is paid off, and you’ve got your emergency fund set — then it could make sense to buy shares of Shopify (NYSE: SHOP), Snowflake (NYSE: SNOW), and Nvidia (NASDAQ: NVDA).

1. Shopify

Shares of e-commerce platform provider Shopify have dropped 73% so far in 2022, but investors have seen some respite of late thanks to impressive third-quarter results that were released last month.

Shopify’s quarterly revenue jumped 22% year over year to $1.4 billion, driven by healthy demand for the company’s merchant solutions. The merchant solutions business brought in $990 million in revenue last quarter, a 26% year-over-year jump and nearly 71% of total revenue. It’s clear that online merchants are turning to Shopify’s payments and shipping solutions to build their e-commerce businesses.

Shopify is looking to bolster its merchant solutions segment with the $2.1 billion acquisition earlier this year of Deliverr, which will help Shopify enhance its fulfillment network and allow merchants to manage inventories across multiple e-commerce platforms. Shopify also aims to offer two-day and next-day delivery options to its merchants in the U.S. following the Deliverr acquisition.

Shopify has reportedly gained access to 80 Deliverr partner-operated warehouses, and that number is expected to double by 2024. The company’s move into e-commerce fulfillment could turn out to be a smart move in the long run. That’s because the e-commerce fulfillment market is expected to clock nearly $200 billion in annual revenue by the end of the decade.

The pursuit of such lucrative markets helps explain why analysts are expecting Shopify’s top line to increase substantially.

SHOP Revenue Estimates for Current Fiscal Year data by YCharts

With Shopify trading at 7.5 times sales right now, as compared to its 2021 price-to-sales multiple of 41, investors are getting a good deal on this e-commerce stock following its brutal sell-off.

2. Snowflake

Snowflake is another fast-growing company that has dropped big time in 2022, losing nearly 58% of its value so far this year. That’s not surprising as richly valued growth stocks have fallen out of favor among investors.

Snowflake stock was trading at a whopping 97 times sales last year. Its sharp drop this year has brought the stock’s price-to-sales ratio down to 27. While that’s still rich, investors shouldn’t forget that Snowflake is growing at a terrific pace to justify its rich valuation.

In the second quarter of fiscal 2023, which ended on July 31, 2022, Snowflake’s revenue shot up 83% year over year to $497 million. The company also reported an extremely impressive net revenue retention rate of 171%, which indicates that Snowflake customers have increased their spending on the company’s platform.

Another metric that points toward healthy demand for Snowflake’s offerings is the massive growth in the company’s remaining performance obligations (RPO), a metric that measures “the amount of contracted future revenue that has not yet been recognized.” Snowflake’s RPO shot up 78% year over year to $2.7 billion last quarter, which points toward a robust revenue pipeline.

It is not surprising that Snowflake’s business is enjoying such solid growth. Snowflake’s solutions allow customers to store data in a scalable manner across multiple cloud providers, keep the data secure, and generate actionable insights with the help of machine learning and artificial intelligence.

The company points out that its total addressable market could hit $248 billion by 2026, driven by growing demand for data warehousing, data science, and other applications. So, Snowflake is scratching the surface of a massive market, which explains why analysts are expecting its earnings to increase at an annual rate of nearly 296% over the next five years.

All this makes Snowflake look like an ideal bet for growth investors looking to buy a beaten-down company.

3. Nvidia

Graphics specialist Nvidia has fallen out of favor, down 46% over the past year. The chipmaker’s decline isn’t surprising given that it has fallen upon difficult times amid slowing personal computer (PC) demand.

Still, analysts are upbeat about Nvidia’s prospects. The company’s top and bottom lines are expected to start accelerating from the next fiscal year and it is expected to clock 23%-plus annual earnings growth for the next five years. A closer look at the markets that Nvidia serves will tell us why the chipmaker is expected to regain its mojo.

The first big opportunity for Nvidia lies in the data center accelerator market. Data centers require multiple accelerators such as graphics cards, server processors, and data processing units to operate in a fast and efficient manner. Nvidia is a key player in data center accelerators with its graphics cards powering the cloud offerings of top service providers.

The company has set its sights on the server processor market as well; its first data center central processing unit (CPU) is set to hit the market in 2023. Meanwhile, Nvidia is also finding traction in emerging applications such as the automotive market and “digital twins.”

Investors shouldn’t forget that the demand for graphics cards used in gaming PCs is expected to rebound in the long run, with Mordor Intelligence forecasting 14% annual growth in this space through 2026. So, savvy investors can consider capitalizing on Nvidia’s drop to buy the stock before it flies higher.

Shares of the chipmaker have been in rally mode in recent days, sending the stock’s earnings multiple up to 51, but that’s still lower than its five-year average of 58. A strong set of results when it reports on Nov. 16 could give this semiconductor stock a shot in the arm.  

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

The post The best US stocks to buy with $500 right now appeared first on The Motley Fool Australia.

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Harsh Chauhan 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 Nvidia, Shopify, and Snowflake Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. The Motley Fool Australia has recommended 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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The MSL Solutions Ltd (ASX: MSL) share price is having a day to remember.

At one stage today, the shares of the SaaS technology provider to the sports, leisure, and hospitality sectors were up 61% to 29 cents.

The MSL share price has pulled back a touch since then and is currently up 57% to 28.2 cents.

Why is the MSL share price is rocketing higher?

Investors have been scrambling to buy this tech share on Tuesday after it announced a takeover approach from an entity controlled by Pemba Capital Partners.

According to the release, the company has entered into a scheme implementation agreement that will see it acquired for 29.5 cents cash per share by way of a scheme of arrangement.

This implies an equity value of $119 million and represents a premium of 63.9% over the MSL share price at yesterday’s close. It is also an 80.7% premium to the one-month volume weighted average price.

MSL’s board of directors believes the scheme is in the best interests of shareholders. As a result, it unanimously recommends that MSL shareholders vote in favour of the scheme. The board intends to vote all MSL shares held or controlled in favour of the scheme.

Though, this is all in the absence of a superior proposal and subject to the independent expert concluding that the scheme is in the best interests of shareholders.

The scheme also remains subject to a number of conditions which must be satisfied or waived before it can be implemented.

MSL’s executive chairman, Tony Toohey, commented:

Our board of directors has undertaken lengthy negotiations with Pemba (a leading investor in small and mid-sized businesses in Australia and New Zealand) to secure an offer which delivers certainty of consideration to our shareholders at a significant premium to the recent historical MSL share prices.

The post Guess which ASX tech share just rocketed 60% on takeover news appeared first on The Motley Fool Australia.

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More reading

• Why is the Core Lithium share price falling 12% on Tuesday?
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