NVIDIA shares have truly emerged as the poster child to for the market’s AI enthusiasm. It is the chipmaker’s AI leverage that has made the stock of the most valuable publicly traded company in the world in recently. The stock has lost some altitude lately, on creeping worries about the sustainability of the AI momentum and broader Tech spending trends. The data center end-market business is benefiting from the growing demand for generative AI and large language models using graphic processing units (GPUs) based on NVIDIA Hopper and Ampere architectures. A surge in hyperscale demand and higher sell-ins to partners across the Gaming and ProViz end markets following the normalization of channel inventory are acting as tailwinds.
Collaborations with Mercedes-Benz and Audi are likely to advance its presence in the autonomous vehicles and other automotive electronics space. However, its near-term prospects are likely to be hurt by softening IT spending amid macroeconomic headwinds.
Shares of Amazon.com have outperformed the Zacks Internet – Commerce industry over the year-to-date period (+28.7% vs. +19.8%). The company is gaining on solid Prime momentum owing to ultrafast delivery services and a strong content portfolio. Strengthening relationships with third-party sellers is a positive.
The strong adoption rate of AWS is aiding the company’s cloud dominance. Improving Alexa skills along with robust smart home product offerings are tailwinds. The robust advertising business is also contributing well. The company’s strong global presence and solid momentum among small and medium businesses remain a plus.
Growing capabilities in grocery, pharmacy, healthcare, and autonomous driving are other positives. A deepening focus on generative AI is a major plus. However, macroeconomic challenges remain headwinds. Rising transportation and fulfillment center costs are concerns.
UnitedHealth shares have gained +2.1% over the past year against the Zacks Medical – HMOs industry’s gain of +3.2%. The company’s top line remains poised for growth on the back of a strong market position, new deals, renewed agreements, and expansion of service offerings.
UnitedHealth’s solid health services segment provides diversification benefits. The Government business remains well-poised for growth in the future. Adjusted net earnings per share are anticipated to be in the $27.5-$28.00 band in 2024, higher than the 2023 reported figure of $25.12. A sturdy balance sheet enables business investments and prudent deployment of capital via share repurchases and dividend payments.
In June 2024, management approved an 11.7% hike in the quarterly dividend. However, membership in its global business continues to be a concern. High operating costs due to rising medical expenses are hurting margins. As such, the stock warrants a cautious stance.
Other noteworthy reports we are featuring today include FedEx Corporation (FDX), DuPont de Nemours, Inc. (DD), and ResMed Inc. (RMD).More By This Author:Q2 Earnings Loom: A Look AheadThe Q2 Earnings Season Gets UnderwayTaking Stock Of The Retail Sector After The Q1 Earnings Season
