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AMD: New bullish wave to $197 has started.Advanced Micro Devices have entered a healthy bullish 1D technical outlook (RSI = 59.730, MACD = 0.360, ADX = 17.320) as the price crossed over the 1D MA200 today, with the 1D RSI above its MA since yesterday. Technically, it has started the 3rd bullish wave of the 3 month Channel Up. The two waves before this have risen by at least +31%, and that is our next target (TP = 197.00) for the next 2 months. ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
NASDAQ:AMDLong
by InvestingScope
10
Uranium Energy Corporation (UEC) AnalysisCompany Overview: Uranium Energy Corporation AMEX:UEC is strategically positioned for growth with the restart of its in-situ recovery (ISR) uranium production at the Christensen Ranch project. This project commenced sending resin to the Irigaray Central Processing Plant in August 2024, marking a significant step in UEC’s operational ramp-up. Key Catalysts: Global Nuclear Energy Demand: The increasing demand for nuclear energy, propelled by partnerships with major technology firms like Google and Amazon, bolsters UEC’s market position. These collaborations highlight the role of nuclear energy in achieving sustainability and energy security amid growing global energy needs. Strategic Focus on North America: UEC's emphasis on North American uranium production aligns with recent U.S. and EU bans on Russian uranium, ensuring a reliable domestic supply. This local production capability enhances UEC's competitive advantage in the face of geopolitical challenges affecting the uranium market. Unhedged Strategy: UEC’s unhedged approach allows investors to benefit directly from rising uranium prices, which are currently hovering around $80/lb. This strategy positions UEC favorably to capitalize on the anticipated increase in uranium demand and prices in the coming years. Investment Outlook: Bullish Outlook: We are bullish on UEC above the $6.50-$7.00 range, as the resumption of production and the company’s strategic initiatives pave the way for significant growth opportunities. Upside Potential: Our target for UEC is set at $14.00-$15.00, driven by strong market fundamentals, the growing demand for nuclear energy, and UEC's proactive approach to domestic production. 🚀 UEC—Capitalizing on the Future of Clean Energy. #NuclearEnergy #UraniumMarket #CleanEnergyGrowth
AMEX:UECLong
by Richtv_official
NVIDIA at a Crossroads: Breakout to $150+ or a Dip to $138 Morning, trading family! Hope you’re all doing well. Let’s chat about NVDA—things are shaping up, and it feels like we’re at a bit of a crossroads. I’ve got a few scenarios in mind, so let’s walk through them together. Scenario 1: If we can break above this trendline, NVDA could gather some steam and make a nice run into the 150s. That would be a pretty strong move, and if momentum holds, we could keep cruising higher from there. Scenario 2: There’s also the chance we dip down into the 139-138 zone first. If buyers show up here, it might just be a little reset—kind of like taking a breath before pushing higher again. Scenario 3: If the market decides to break below 138, we could see a deeper pullback toward 136. It might feel like a bigger drop, but that could be the market giving us a better entry point before it starts building back up. The key here is not to get ahead of things—just let the market show us its hand. It’s all about staying patient and prepared. What do you guys think? Do we break up, or do we get a dip first? I’d love to hear your thoughts—drop a comment below and let’s talk it through. Mindbloome Trading/ Kris Trade What You See
NASDAQ:NVDA
by Mindbloome-Trading
Genus Power Infra: Bullish Breakout – Buy now for higher targets🔍 Technical Analysis: NSE:GENUSPOWER (NSE: GENUSPOWER) 1️⃣ Overview: 📈 Current Market Price (CMP): ₹430.15 (+2.26%) 🗓️ Date & Time: As of 15:25 (UTC+5:30) 🕹️ Chart Analysis: Daily (1D) 2️⃣ Technical Indicators Overview: 📊 Moving Averages: 🟢 50-Day EMA: ₹399.89, currently acting as a support zone. 🔵 200-Day EMA: ₹332.71, indicating the longer-term trend remains positive. 📦 Volume Profile: Strong demand visible between ₹360-₹380, suggesting robust buying interest at lower levels. 📈 MACD: Bullish crossover with the MACD line above the signal line, implying momentum is still positive. MACD Line: 3.76 Signal Line: 1.04 Histogram: 📈 Positive, indicating rising momentum. 📉 Williams %R (14): At -5.59, signaling overbought conditions, which might result in a short-term pullback. 💹 Stochastic RSI (14, 3): At 100, indicating strong bullish momentum, though caution is advised as overbought zones can precede minor corrections. 🟣 Parabolic SAR: Positioned below the price, supporting the ongoing uptrend. 3️⃣ Fibonacci Retracement Levels: The stock is retracing from the swing high of ₹451.55 to the swing low of ₹351.05. 📐 38.2% Retracement: ₹399.30 – Strong support. 📐 50% Retracement: ₹414.05 – Intermediate resistance. 📐 61.8% Retracement: ₹428.80 – Currently breached, signaling bullish strength. 📐 78.6% Retracement: ₹442.80 – Next resistance level to watch . 4️⃣ Rationale for Buy: 🚀 Breakout above 61.8% Fibonacci Level: The breach above ₹428.80 indicates a potential continuation of the upward move. 🔥 Bullish Momentum: MACD crossover, Stochastic RSI in overbought territory, and Parabolic SAR below the price all point to a continuation of the bullish trend. 📈 Volume Surge: Increased volume activity supports the bullish move, suggesting robust buying interest. 📦 Demand Zone: The significant demand between ₹360-₹380 acts as a strong base, providing a good risk-reward opportunity for entry. 5️⃣ Recommendation: 🔔 Action: Buy 🎯 Target 1: ₹442.80 (78.6% Fibonacci Level) 🎯 Target 2: ₹451.55 (Recent Swing High) 🛑 Stop Loss: ₹414.05 (50% Fibonacci Level) to protect against downside risk. 6️⃣ Risk Management: 📥 Entry Strategy: Consider entering near the current price or on minor pullbacks towards the 61.8% retracement level (₹428.80). ⚖️ Risk-to-Reward Ratio: The trade setup offers a favorable risk-to-reward ratio of at least 1:2 based on defined targets and stop-loss levels. ⚠️ Disclaimer: This analysis is based on technical indicators and market patterns and is intended for educational purposes. Market conditions may change, and this is not investment advice. Please conduct your own research or consult a financial advisor before making trading decisions. #GenusPower 🚀 #TechnicalAnalysis 📊 #StockMarket 📈 #FibonacciLevels 📐 #SwingTrading 💹 #MACD 🔵 #StochasticRSI 💠 #VolumeProfile 📦 #BuyRecommendation 🛒 #IndianStocks 🇮🇳 #NSE 📉 #FinogentSolutions 💼
NSE:GENUSPOWERLong
by finogent
Zebra Technologies (ZBRA) AnalysisCompany Overview: Zebra Technologies NASDAQ:ZBRA is making significant strides in AI integration within its enterprise asset intelligence and data capture services. The company is positioning itself as a leader in AI-driven innovation, with broad applications across multiple sectors. CEO Bill Burns has emphasized the strong rebound in enterprise mobile computing, reflecting sustained demand for Zebra’s innovative solutions. Key Catalysts: AI Integration: The use of AI in enterprise solutions is key to Zebra’s growth strategy. By enhancing its asset intelligence and data capture services, Zebra is positioned to lead in industries such as logistics, retail, and healthcare. AI can drive operational efficiency and improve decision-making for its clients, increasing demand for its advanced technologies. Strong Enterprise Demand: The rebound in enterprise mobile computing across verticals signals long-term demand for Zebra's mobile and automation solutions, further solidifying its market leadership. Productivity and Cost Savings Plan: Zebra’s 2024 Productivity Plan and Voluntary Retirement Plan aim to achieve $120 million in annualized savings, which should lead to improved profitability. These cost-saving measures could enhance both gross margins and operational efficiency, providing additional capital for strategic investments in technology. Investment Outlook: Bullish Outlook: We are bullish on ZBRA above $340.00-$345.00, with the integration of AI in its services, coupled with cost-saving initiatives, positioning the company for sustained growth. Upside Potential: Our upside target is $500.00-$510.00, driven by increased AI adoption, strong demand in mobile computing, and the financial benefits from its productivity and cost-reduction efforts. 🚀 ZBRA—Leading the Future with AI and Enterprise Intelligence. #AIInnovation #MobileComputing #CostEfficiency
NASDAQ:ZBRALong
by Richtv_official
VISA: 2 year Channel Up seeks the next bullish wave.Visa is on a neutral 1D technical outlook (RSI = 53.426, MACD = 2.190, ADX = 43.132) and just above neutrality levels on 1W (RSI = 56.042) as despite being supported by the 1W MA50, it has been rejected twice on the R1 level. That would have been concerning on any other occasion but this time it's not as we consider this similar to the November 2022 R1 pullback, which after being contained by the 1W MA50, it reversed to the 1.382 Fibonacci extension. The 1W RSI trading above its MA for 2 months now, is also similar to October-November 2022. Consequently, we turn bullish again, aiming for the 1.382 Fib (TP = 305.00). See how our prior idea has worked out: ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
NYSE:VLong
by InvestingScope
2
TATACOMM: Ascending Channel Breakdown & Critical Support LevelsPattern Identified: The stock is trading within an ascending channel (parallel trendlines) that has been in formation since early 2021. Recently, it appears to be approaching the l ower support of the channel , signaling potential risks of a breakdown if selling pressure continues. Key Technical Observations: Channel Breakdown Threat: The price has been trending within an upward-sloping channel. However, it recently fell sharply from the upper boundary of the channel and is now testing the lower boundary. A confirmed breakdown below the lower trendline could trigger a further downtrend. Critical Support Levels: The ₹1,783 level has held strong as an immediate support zone. If broken, the next support lies at ₹1,693 , a significant historical level from previous price action. A break below ₹1,693 could lead to a deeper correction, potentially targeting the ₹1,500-1,400 zone. Resistance Levels: If the stock manages to bounce, it will face overhead resistance at: ₹1,873 (previous resistance) ₹2,000 (psychological barrier) ₹2,200 (channel top) Moving Averages: The stock is currently hovering near its 20-week EMA , which aligns with the lower channel support. It is also far above its 200-week EMA , indicating long-term uptrend strength, though the current pullback should be monitored closely. Volume and RSI: Volume spiked during recent sell-offs, suggesting a significant distribution phase. The RSI (Relative Strength Index) is nearing oversold territory, which might lead to a short-term bounce. However, a lower RSI could indicate bearish momentum persisting. Outlook: A channel breakdown may indicate a trend reversal, with the possibility of a deeper correction towards ₹1,500 if key support levels don’t hold. Traders should watch for a confirmed breakdown or a bounce off the lower channel to time potential trades. Conclusion: The stock is at a pivotal point, testing the lower boundary of its ascending channel. A decisive move below the ₹1,783 support could accelerate the downside, whereas a successful defense might offer a good risk-reward for a bounce. Investors should closely monitor price action and volume for signs of confirmation.
NSE:TATACOMM
by AngshumanSaikia
Bharat Electronics Ltd: Key Support Zone and Potential Breakout Technical Overview Descending Triangle Pattern: The price action appears to be forming a descending triangle, which is typically considered a bearish continuation pattern. The triangle's resistance line is a downward-sloping trendline connecting the series of lower highs, and the support is horizontal around the 270-265 INR level. Support and Resistance: Immediate Resistance: The first resistance is at 289.60 INR, as indicated by the horizontal line. Major Resistance: Above this, significant resistance exists around 312.70 INR and 340.25 INR. Support Zone: The highlighted yellow area between 265-270 INR indicates strong support. The price has tested this zone multiple times without breaking down, suggesting that it is a key area to watch for either a bounce or a breakdown. Moving Averages: 50-Day Moving Average: The price is currently close to the 50-day moving average. A breakout or breakdown from this average could provide a signal for further price movement. 200-Day Moving Average: The 200-day moving average is trending upwards and acts as long-term support. It's a key indicator for identifying the overall trend, which remains bullish in the long term. RSI (Relative Strength Index): The RSI is showing a bullish divergence. Even though the price has made a lower low, the RSI has formed a higher low, signaling a potential reversal or bounce from the current levels. Volume: There is a noticeable drop in volume over the recent sessions, suggesting that traders are waiting for a decisive move. If the price breaks either the support or resistance lines, a spike in volume will likely confirm the direction of the move. Target Price: Bullish Target: If the price breaks above the descending triangle and crosses the resistance at 289.60 INR, the next target could be 312.70 INR, with a long-term target around 340.25 INR. Bearish Target: A breakdown below 265 INR could lead to further declines, with the next significant support level around 240 INR. Conclusion: The stock is currently trading near a critical support zone in a descending triangle pattern. Given the bullish divergence in the RSI, there's potential for a bounce. However, traders should wait for a breakout above the 289.60 INR level for bullish confirmation or a breakdown below 265 INR for bearish continuation. Risk/Reward Tip: Use stop-loss strategies close to support and resistance levels to manage risk effectively, as either scenario (breakout or breakdown) can lead to significant moves.
NSE:BELLong
by AngshumanSaikia
WE GOT A 5/5 TRADE SETUP ON MBLY. LARGE MOVE INCOMING! NASDAQ:MBLY 🖐️WE GOT A 5/5 TRADE SETUP ON MOBILEYE. My trading strategy consists of 5 Indicators: 1.) A clear and clean Charting pattern setup. ✔️For this chart that is a symmetrical pattern. 2.) A Volume Gap to fill and strong buying area. ✔️ Clearly sitting on a large "Volume shelf" - JW 3.) The MACD up trending. Crossing Zero line=Bullish ✔️ We are indeed up trending and a Zero line crossing is imminent for this chart. 4.) Stochastic rising and making higher lows. ✔️ Up trending and just crossed the middle RSI band. Higher lows are being made on this chart. 5.) Weekly Stochastic Up Trend. Most bullish once it crosses up through lower band or down through upper band. ✔️ Clearly had a red through yellow flip and are up trending on this charts stochastic heading toward Lower band. Bonus: We are staying above the 50MA and about to have the 25MA cross upward through the 50MA as well (BULLISH Signal). Finally, I've been following this stock for awhile now and every market open we get a massive amount of short volume in order to try and drive down the stock and get the 20% of shareholders who aren't NASDAQ:INTC to sell them their shares for them to cover at lower prices. I hope you enjoyed it! Like ❤️ Follow 🤳 Share 🔂 NASDAQ:QQQ AMEX:SPY AMEX:IWM NASDAQ:TSLA NASDAQ:ENPH NASDAQ:SBUX NYSE:MCD #Stock #stocks #Stockmarket #EarningsReport #TradingTips #investing #investingideas
NASDAQ:MBLYLong
by RonnieV29
18
ZensarTec Ready to Rally! Waiting for Targets to Fire!Technical Analysis: ZensarTec on the 15-minute timeframe is poised for a long trade after a solid entry signal. The price is currently moving upward, following the support from the Risological Dotted Trendline, confirming the strength in momentum. Key Levels: Entry: 680.00 Stop Loss (SL): 658.20 Target 1 (TP1): 706.90 (Next target) Target 2 (TP2): 750.50 Target 3 (TP3): 794.05 Target 4 (TP4): 821.00 Observations: The price has recently shown signs of strength, bouncing off the Risological Dotted Trendline and gaining bullish momentum. With volume support, the price is likely to hit the initial target of TP1 soon, potentially leading to a cascade of target completions. ZensarTec is gearing up for an upward breakout as it tests its first target. Watch for TP1 to confirm and the possibility of higher targets being hit as bullish momentum builds. Stay tuned for a strong price movement ahead!
NSE:ZENSARTECHLong
by ProfitsNinja
BlueStarCo Soars from 747.95 to 1926: All Targets Reached!BlueStarCo has shown a remarkable bullish run since entering at 747.95 on 6th September 2023. The price has not only reached all take profit targets but also surged far beyond expectations, currently trading at 1926. Key Levels: Entry: 747.95 – This marked the point where the bullish momentum took hold. Stop-Loss (SL): 724.85 – Positioned below the entry to minimize downside risk. Take Profit 1 (TP1): 776.55 – Reached early in the trade, confirming a strong start. Take Profit 2 (TP2): 822.80 – Hit as the upward momentum continued. Take Profit 3 (TP3): 869.10 – Met, indicating strong sustained buying pressure. Take Profit 4 (TP4): 897.65 – Final target hit, followed by a significant price surge beyond all targets. Trend Analysis: The price action has been well-supported by the Risological dotted trendline, confirming a consistent uptrend. The continuous rise from the entry point shows no signs of reversal, with the current price sitting at 1926, nearly doubling the initial entry value. Traders who held on to this trade have seen tremendous returns, and further gains are still possible as the momentum remains strong.
NSE:BLUESTARCOLong
by ProfitsNinja
JPM: Overbought on 1M. Buying becomes risky now.JP Morgan is almost overbought on its 1M technical outlook (RSI = 69.452, MACD = 20.800, ADX = 54.049), trading very close to the top of the 12 year Channel Up. Being overbought on the wider/ longest timeframe available, indicates trend exhastion and a potential bearish reversal. Basically, we continue to use the same pattern that helped us get a strong buy last time and this time it shows that the last two times the 1M RSI was this overbought, the stock pulled back to at least the 0.236 Fibonacci level. Consequently we expect a lengthy but relatively controlled correction to start in the coming candles to test the 0.236 Fib and approach the 1M MA50 (TP = 187.00). See how our prior idea has worked out: ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
NYSE:JPMShort
by InvestingScope
1
Sweetgreen (SG) AnalysisCompany Overview: Sweetgreen NYSE:SG is strategically expanding its footprint, with four new restaurant openings in Q2 2024, including a significant location in New Hampshire. This move underscores Sweetgreen's focus on untapped markets, aimed at driving revenue growth and geographic diversification. Key Catalysts: Expansion into New Markets: Opening in new locations, particularly in New Hampshire, demonstrates Sweetgreen’s plan to broaden its market presence, catering to new customer bases, which could meaningfully contribute to its overall growth trajectory. Infinite Kitchen Concept: The successful implementation of the Infinite Kitchen at Penn Plaza is a game-changer. This innovative concept, which reduces wait times to under 3 minutes while improving operational efficiency, enhances the customer experience. As this model is scaled across more locations, Sweetgreen stands to gain from higher margins and enhanced customer satisfaction, potentially leading to stronger unit economics. Operational Efficiency: The Infinite Kitchen rollout improves labor productivity and reduces operational bottlenecks, allowing Sweetgreen to serve more customers in less time. This could be instrumental in improving both top-line growth and profit margins. Investment Outlook: Bullish Outlook: We remain bullish on SG above $33.00-$34.00, with the company's ability to innovate through its Infinite Kitchen model and its focus on entering new markets. Upside Potential: Our upside target for SG is $62.00-$64.00, driven by operational improvements, increased restaurant count, and scalability of its efficient kitchen model, which should bolster profitability and revenue growth. 🚀 SG—Innovating in Food Service with Efficiency and Expansion. #RestaurantGrowth #OperationalExcellence #Scalability
NYSE:SGLong
by Richtv_official
1
SoFi Technologies (SOFI) AnalysisCompany Overview: SoFi Technologies NASDAQ:SOFI has been on an impressive growth trajectory, with its member base increasing by over 40% year-over-year to reach 8.8 million as of Q2 2024. This significant expansion underscores SoFi's ability to not only acquire new members but also retain and cross-sell to its user base, positioning the company as a major player in the fintech space. Key Catalysts: Product Mix Shift: The strategic shift from a reliance on lending products to a broader array of financial services products—which now outpace lending offerings—boosts margins and improves the lifetime value of SoFi’s customers. This diversification strengthens the company's business model by lowering its dependence on traditional loans. Earnings Momentum: SoFi has consistently outperformed earnings expectations, evidenced by 11 upward revisions in the last 90 days. This signals strong financial management and operational efficiency, which is expected to drive further investor confidence. Growing Member Base: SoFi's ability to grow its member base at a 40% annual rate is a clear sign of the company’s competitive advantage in the fintech space, particularly through the seamless cross-selling of products across its ecosystem. Investment Outlook: Bullish Outlook: We are bullish on SOFI above $9.00-$10.00, as the company’s ability to grow its member base and shift to higher-margin products sets the stage for sustained growth and stock appreciation. Upside Potential: Our upside target for SOFI is $15.00-$16.00, driven by strong earnings performance, a diversified product mix, and expanding membership, all of which contribute to improving financial metrics and stock valuation. 🚀 SOFI—Fintech Leader on a High-Growth Path. #Fintech #FinancialServices #EarningsOutperformance
NASDAQ:SOFILong
by Richtv_official
penny 1. **Rounding Bottoms** 🔵 The stock shows a series of **rounding bottoms** (marked on the chart), indicating a slow but steady shift from bearish to bullish sentiment. This pattern is like a **U-shape** 🏺, where the price slowly bottoms out and starts to rise again. The concept of **higher highs (HH)** ⬆️ rounding bottoms shows that each new bottom forms at a higher level than the previous one, reflecting growing strength in the stock. 2. **Volume Contraction** 📉 **Whenever stock forms a rounding bottom, volume contracts** 🛑. This is visible in the early stages of these rounded formations, where the volume bars shrink. Contraction often hints that **weak hands** are exiting the stock and strong hands are accumulating quietly. 3. **Volume Expansion on Breakout** 📈 As soon as the stock moves up**, you can see the **volume build** as well. This signals a breakout from the rounding bottom pattern as **new buyers** rush in with increasing enthusiasm 🔥. 4. **Multiple Rounding Patterns** 🔄 The stock exhibits multiple rounding patterns, and each is followed by a **rise** ⬆️ in price. This shows the stock moves in cycles, consolidating for some time before **breaking out** again. 5. **Recent Move and Strong Push** 💥 The most recent move in October 2024 is dramatic. The stock surged from around ₹180 to ₹207, a significant gain of about **16.64%** 📊, suggesting bullish momentum is accelerating 🚀. Look at the **volume spike** 🔊 accompanying the price surge—this confirms strong institutional or retail interest in the stock during this period. 6. **Key Takeaway: Patience Pays** ⌛ **Higher highs in rounding bottoms** indicate that the stock is slowly but consistently gaining strength. Though these formations take time to develop, they are often followed by strong upward movements 🏁. Extra tip: When you spot **volume contraction** during a rounded bottom, it could signal a potential **entry point** before a breakout. The expansion in volume later confirms a **strong uptrend**.
NSE:PENINDLong
by investigationofchart
What America Does with Its Money ? 🇺🇸 Decoding America's Spending: A Deep Dive into Government Finances This topic has been on the horizon for a while, and I think many new traders will be pleased to see it so LFG Just like a business, the government has its own financial records : 💰 Money comes in (primarily from taxes) 💸 Money goes out (to fund a variety of programs) With an expected gross domestic product (GDP) of nearly $29 trillion in 2024, the US remains the world’s largest economy, surpassing China’s $18.5 trillion. However, the US government isn’t exactly profitable. In fact, it’s been consistently running a growing deficit, raising concerns about its long-term financial stability. As a general election approaches, it's more important than ever to understand how the US generates and spends its money. So, let’s dive into the details Here’s a quick overview: - Revenue: A deep dive into taxes - Spending: Powering the nation - Bottom Line: Operating costs & the deficit - National Debt: A mounting challenge - The Future: America's financial outlook 1. Revenue: A Deep Dive into Taxes The US government operates on an enormous scale, and like any large organization, it requires a consistent stream of income to stay functional. However, unlike businesses that sell products or services, the government generates revenue primarily through taxes and fees In fiscal year 2023, the federal government collected an astounding $4.4 trillion So, where does all of this money come from? Let’s take a closer look: 👥 Individual Income Taxes:Nearly 50% of the government’s total revenue comes from individuals. Every time you receive a paycheck, a portion is automatically sent to Uncle Sam. This also includes taxes on capital gains from investments. 🏦 Social Security and Medicare Taxes: About 36% of revenue is generated from these taxes, which support programs like Social Security and Medicare for retirees and older adults. It’s a system where current workers help fund benefits for those who have already retired. 🏢 Corporate Income Taxes:Around 10% of the total revenue comes from businesses, which contribute a portion of their profits to the federal government. This is reflected in the income tax provisions that companies report. 🧩 Other Revenue:The remaining ~4% is sourced from various channels such as excise taxes (extra charges on goods like alcohol and tobacco), estate taxes, customs duties, and even fees collected from national park visits. 2. Spending: Powering the Nation Now that we’ve seen how money flows into the US Treasury, it’s time to explore the exciting part figuring out how it’s spent. The US government faces the enormous responsibility of keeping the country functioning, covering everything from national defense to healthcare and infrastructure. And that demands a massive amount of spending In fiscal year 2023, the federal government's net cost was $7.9 trillion, which is almost as large as the combined GDP of Germany and Japan the world’s third and fourth largest economies! -Outlays vs. Net Cost:In FY23, total outlays (the actual cash spent) reached $6.1 trillion. Outlays refer to the cash disbursements, while the net cost also includes accrual-based accounting adjustments, such as changes in the future value of federal employee retirement benefits. Who’s Deciding Where the Money Goes So, how does the government determine how to allocate all this money? It’s a balancing act involving both the President and Congress: -The President’s Proposal: The President begins the process by proposing a budget, outlining spending priorities based on requests from federal agencies. Think of it as a wish list—with a lot of extra zeros. -House and Senate Role:Next, the House and Senate Budget Committees take over. They review the President’s proposal, make adjustments, and ultimately create the final spending bills. This process involves hearings, debates, and a fair amount of political negotiation. Types of Spending -Mandatory Spending:These are legally required expenses, like Social Security and Medicare, which make up a significant portion of the budget. These costs rise over time, particularly as the population ages -Discretionary Spending:This is the part of the budget where the President and Congress decide how much to allocate to areas like defense, education, and more. In FY23, discretionary spending accounted for roughly 28% of total outlays, and it involves a yearly struggle as various departments compete for funding. -Supplemental Spending: In cases of emergency, Congress can pass additional funding outside the normal budget cycle, as it did for the COVID-19 pandemic in 2020. Where the Money Goes Now, let's dive deeper into the specific areas where all that spending is directed: -🏥 Healthcare Heavyweight:The Department of Health and Human Services commands the largest portion of spending, making up 22% of the net cost. This reflects the huge outlays for healthcare programs like Medicare and Medicaid. -👵 Social Safety Net:Programs like Veterans Affairs and the Social Security Administration also require significant funding, together accounting for 18% of the budget. This demonstrates the high priority placed on supporting veterans and retirees. -🫡 Defense and Security:The Department of Defense, tasked with ensuring national security, takes up 13% of government spending! -💸 The Interest Burden: A growing share of the budget is going toward paying interest on the national debt, consuming 9% of total spending. In FY23, government outlays represented 22% of the US economy (GDP). Over the past decade, this figure has remained slightly above 20%, excluding the exceptional impact of the COVID-19 pandemic. 3. Bottom Line: Operating Cost & Deficit When government expenditures exceed its revenue, a budget deficit occurs In FY23, the U.S. government recorded a $1.7 trillion deficit (revenue minus outlays). Here’s a breakdown of two key financial terms: -Net Operating Cost:This includes all costs incurred by the government, even if the payments haven’t been made yet. In FY23, the net operating cost was $3.4 trillion -Budget Deficit:This is a narrower measure, focusing only on the cash difference between revenue and outlays. As mentioned, the FY23 budget deficit stood at $1.7 trillion Both of these financial measures reveal a government consistently spending beyond its means—a pattern that has persisted for decades. In fact, over the past 50 years, the U.S. federal budget has only seen a surplus four times, with the most recent one occurring in 2001. 4. National Debt: A Mounting Challenge So, how does the government continue operating despite being in the red? It borrows money, mainly by issuing Treasury bonds, bills, and other securities. This borrowing adds to the national debt, which has grown into a major concern for the country’s economic outlook. As of September 2024, the national debt has reached a staggering $36 trillion. To put that in perspective, it's as if every person in the US owes over $100,000! Every time the government spends more than it earns, the shortfall is added to the national debt, which, in turn, increases the interest payments that need to be made in the future. Why the Debt Keeps Growing ? Several factors contribute to the relentless increase of the national debt: -Persistent Deficits:For decades, the government has continuously spent more than it collects in revenue, leading to ongoing debt accumulation. -Wars and Economic Crises: Significant events such as wars (like those in Iraq and Afghanistan) and economic crises (including the 2008 recession and the COVID-19 pandemic) often necessitate large government expenditures, further escalating the debt. -Tax Cuts and Spending Increases: Policy decisions that either reduce government revenue (through tax cuts) or increase spending (by introducing new programs or expanding existing ones) also play a role in growing the debt. The national debt presents a complicated issue without straightforward solutions. It requires balancing essential funding for programs and services while ensuring the nation’s long-term financial health. 5. The Future: America’s Finances The road ahead is filled with challenges. The national debt continues to rise, with a debt-to-GDP ratio surpassing 100%, raising concerns about the nation's long-term economic stability and ability to fulfill financial commitments. According to the Department of the Treasury, the current fiscal trajectory is unsustainable. Projections based on existing policies show a persistent gap between expected revenue and spending. Without substantial policy reforms, the national debt is likely to keep increasing. Several factors will influence the future of America’s finances: -Economic Growth: A strong economy generates higher tax revenues, making it easier to manage the debt. Conversely, slower growth could worsen the deficit and increase the debt burden. -Interest Rates:Rising interest rates would elevate the cost of servicing the national debt, redirecting funds from other vital programs. -Inflation: Excessive government debt can contribute to inflation, diminishing the purchasing power of individuals and businesses. -Political Polarization: The significant partisan divide in U.S. politics complicates consensus-building on fiscal policy and the implementation of long-term solutions to address the debt. -Demographic Shifts: An aging population increases pressure on entitlement programs like Social Security and Medicare, leading to higher government spending and potentially widening the deficit. To tackle the challenges of growing debt and deficits, a combination of strategies is needed: -Controlling Spending:Identifying areas for budget cuts or finding more efficient methods to deliver government services. -Increasing Revenue:Exploring avenues for raising revenue through tax reforms or other means. -Fostering Economic Growth:Implementing policies that promote sustainable long-term economic growth and boost tax revenues. -Encouraging Bipartisan Cooperation:Seeking common ground across party lines to implement lasting fiscal reforms. The future of America’s finances remains uncertain, but one thing is clear: addressing the national debt and ensuring the nation’s long-term fiscal health will require tough decisions and a commitment to responsible financial management. What Can Be Done? It’s easy to feel overwhelmed by the scale of these challenges, but meaningful change often starts with informed citizens. As we head into a new election cycle, understanding how the US government manages its finances is more crucial than ever. So, what do you think should be America’s financial priorities? Should policymakers concentrate on cutting spending, raising taxes, or fostering economic growth?
TVC:DXYEducation
by moonypto
2
Advanced Micro Devices | AMD Team RED is READY As with any competitor, a quarterly earnings report from a peer can provide great insight into the market. For Advanced Micro Devices, the Q2'23 earnings report from Intel provides great views on the surging demand for AI chips and a rebound in PC demand crucial for AMD The most immediate signal from Intel beating Q2'23 estimates and guiding up for Q3 is the rebound in PC demand. Most importantly, the inventory correction appears over with OEMs no longer digesting chip inventory.Back in Q3'22, AMD shocked the market by cutting PC revenue estimates by $1 billion. The company quickly went from $2 billion in quarterly CPU sales for PCs to less than $1 billion. Intel still reported Q2 Client Computing revenue was down 12% YoY to $6.8 billion, but the number was up $1.0 billion sequentially. The chip giant guided up Q3 revenue to $13.4 billion, up $0.5 billion sequentially.In Q1'23, AMD reported that client revenues had fallen further to only $739 million. AMD CPU revenues are now far over $1 billion per quarter below the peak levels providing substantial upside potential when the PC market normalizes. Intel discussed a mixed picture for their business in the near term due to AI. The chip giant is seeing a wallet share shift from the sever CPU spend towards AI chips.The move is both good and bad for AMD. The company has the MI300 AI GPU chip hitting the market in Q4 providing a strong competitor to the booming demand for the H100 from Nvidia, but the chip isn't out on the market yet. In the near term, AMD may see some suppressed data center demand while heading into 2024. Ultimately, the company should see upside from AI demand for the MI300 along with the Alveo AI accelerator.On the Q2'23 earnings call, Intel CEO Pat Gelsinger suggested the AI pipeline for 2024 had surged to $1 billion: In my formal remarks, we said we now have over $1 billion of pipeline, 6x in the last quarter. Going back a few months, Morgan Stanley had estimated the AI potential for AMD was only $400 million with upside potential to $1.2 billion. The Intel forecasts would suggest the AI potential for AMD is far higher next year when the MI300 is in full-scale production. Nvidia guided up current quarter sales estimates by 50% to over $11 billion. The company suggested data center sales would reach $7+ billion in the quarter. AMD has only seen data center sales reach $1.3 billion in quarterly sales leaving a huge gap from Nvidia. Even Intel still hit $4.0 billion in data center sales during Q2'23, though the amount is down nearly 20% form 2022 levels due in part to losing market share to AMD. The big issue for AMD is whether data center sales growth stalls causing a miss to 2H sales targets while booming AI demand ultimately boosts sales starting in Q1'24, or maybe Q4. The chip company peaked at quarterly sales of $6.6 billion back Q2'22 and the current quarterly analyst estimates aren't very aggressive. A rebound in PC demand to more normalized levels places AMD back at the Q4'23 revenue target of $6.5 billion alone. A PC rebound to normal digestion ($2 billion quarterly run rate) along with higher data center or AI demand leads to vastly higher revenues in 2024. The current analysts aren't even factoring in much growth in the Q2'24 revenue estimate of $6.76 billion. The amount is just 4% upside from Q2'22 despite potentially surging demand from AMD entering the AI GPU space. AMD is set to report earrings after the close on August 1. Investors should focus less on the Q2 numbers or even Q3 guidance and focus more on a return to more normalized revenue levels plus the upside from AI.Our view has long held that AMD has the earnings potential of $5 to $6 and the AI opportunity is all upside to this view. The key investor takeaway is that AMD is still $50 below all time highs while Nvidia has soared over $100 above the late 2021 highs. Investors should use the current weakness in AMD to load up on the stock while leaving some capital to buy any weakness following Q2 earnings due to the potential for near term disappointment leading to long term opportunities.
NASDAQ:AMDLong
by moonypto
12
Airbnb | ABNB Airbnb is the leader in Alternative Accommodations and experiences. I believe their community of individual hosts and strong brand differentiates them from travel peers. The emerging trend of long-term stays would boost Airbnb’s profit margins and expand the entire travel accommodation market size Airbnb estimates its current total addressable market to be $3.4 trillion, including $1.8 trillion in short term stays, $ 210 billion in long term stays, and $ 1.4 trillion in experiences. Coupled with a notably underpenetrated market size, the global travel market is growing at an above GDP rate. Airbnb’s current market penetration represents less than 2% of the share. As such, there is a huge runway for Airbnb’s growth over the next decade. In terms of competition, most Online Travel Agencies (OTA) provide traditional hotel accommodation (Marriott, Hilton, Accor, Wyndham, and InterContinental, for example). These OTAs are not the real competitors for Airbnb. Instead, Booking.com (BKNG) is expanding its traditional hotel business into the alternative accommodation industry. Expedia (EXPE) entered the alternative accommodation market via the acquisition of VRBO in December 2015. However, Airbnb has the first-mover advantage with a very strong brand. I believe Airbnb’s technology and supplies are superior to their peers, and it is hard for Expedia and Booking.com to compete against Airbnb in the alternative accommodations space. One of the main expenses for Online Travel Agencies is sales and marketing. They have to spend billions of dollars on Google, Facebook, and other social media platforms to attract traffic. The table below shows the sales and marketing expenses as a percentage of sales. Both Booking.com and Expedia spend almost half of their sales on sales and marketing. According to Airbnb’s disclosure, 80% of their website traffic comes from direct and organic search. In contrast, Booking.com and Expedia only have 60% direct traffic. In other words, Airbnb has the highest brand awareness among these travelers. With a high ratio of direct traffic and organic search, Airbnb spends much less than its peers. In Q1 FY23’s earning call, Airbnb indicated their sales and marketing expense as percentage of sales would remain the same in FY23. In late 2019, Airbnb's costs were rising, and growth was slowing. They spent a huge amount of money on performance marketing, which was basically selling their products as a commodity. Their product was looking less different from their competitors. When the COVID occurred, they lost 80% of sales in eight weeks, and they shut down all marketing spending. Interestingly, when the travel market rebounded, Airbnb's business came back to almost the same level as before, with much less marketing expenses. Currently, they spend much less on performance marketing, and most of their expenses are focused on their products/services. They have had 600,000 articles about Airbnb. These efforts have put Airbnb in a much better shape today. 90% of Airbnb's hosts are individuals. Airbnb can capitalize on the personal experience provided by these unique individual hosts, as opposed to a standard hotel service. Customers can find unique properties, differentiated amenities, as well as local insights from these individual hosts. Airbnb is putting in a lot of effort into the experience market. In Q4 FY22's earnings call, Airbnb expressed that they were beginning to ramp up their Airbnb Experience business and expect to launch more products/services over the coming years. In my opinion, Airbnb Experience may not bring notable direct sales to Airbnb, but it would enhance the stickiness and loyalty of Airbnb's customers. Airbnb Experience would make the Airbnb platform unique and boost their sales indirectly. Furthermore, Airbnb Experience could become more relevant with AI technology. In Q1 FY23's earnings call, Airbnb disclosed that they are building AI into their products. Airbnb is working with OpenAI ChatGPT, and Airbnb will embed ChatGPT into their app. The AI powered product will be launched next year. Leveraging AI technology, Airbnb can make their Airbnb Experience and accommodation recommendations more relevant to any consumer. To put it another way, Airbnb would know your preferences for travel destinations and accommodations before you start searching for anything. Long-term Stay: As disclosed, 20% of Airbnb's gross bookings are long-term stays currently. Long-term stays are the fastest-growing segment in terms of trip length. The pandemic also accelerated some inevitable growth for long-term stays. Long-term stays mean higher margins for both hosts and Airbnb. In Q1 FY23's earnings call, Airbnb indicated that long-term stays would be one of the biggest growth areas over the next five years. Airbnb made over a dozen upgrades to long-term stays based on affordability, and they also have new discounting tools for hosts on weekly and monthly stays. Airbnb expects more hosts to exclusively list long-term stays with Airbnb. In addition, 62% of Airbnb's guests are under 34 years old, and Airbnb is focusing on the next generation of travelers. These young customers are more likely to use Airbnb as the platform for long-term stays. The key thing to remember is that more long-term stays mean higher margins for Airbnb. Airbnb indicated that, in the current macroeconomic environment, consumers are looking for affordable ways to travel on Airbnb. Airbnb is adding more affordable accommodations to their platform. The average price of Airbnb rooms is only $67 per night. Before the pandemic, 80% of Airbnb's sales were coming from either cross-border or urban accommodations. The cross-border business would contribute more sales to Airbnb than other types of travel. The cross-border traveling could be very weak if high inflation persists. Despite this, the global travel market had been growing fast in the past, and I expect the growth will continue in the future. We are using a two-stage DCF model to estimate Airbnb’s fair value. In the model, we assume 20% of normalized sales growth rate, which we believe is quite conservative. We assume they can expand their operating margin by 30bps annually and will reach 25.5% in FY32.Their free cash flow conversion was quite healthy in the past, and we assume they will deliver 35.8% in FY32. In addition, we use 10% of WACC, and 15% of nonGAAP tax rate in the model. The present value of Free Cash Flow to the Firm (FCFF) over the next 10 years is estimated to be $32 billion, and the present value of terminal value is $88 billion. As such, the total enterprise value is estimated to be $120 billion. Adjusting gross debt and cash balance, the fair value of the stock price is $ 200, according to our estimate. All things considered, the huge underpenetrated market, strong brand awareness, and growing trend of long-term stays, in my opinion, will provide Airbnb with a huge runway for growth over the next decade. Their competitors are way behind them, and Airbnb would be the best player for the alternative accommodation service provider. In my view, the current stock price is significantly undervalued, and we encourage investors to buy during the weakness. at the end I always bet on Brian Chesky
NASDAQ:ABNBLong
by moonypto
2
Shopify Inc | SHOP & AIShopify stock has seen sideways momentum for the last few weeks despite posting good results in the recent quarter. One of the reasons is the bull run in early 2023 due to which the stock has seen over 60% jump in year-to-date. Shopify has been able to reignite revenue growth in the last few quarters and there are strong tailwinds that can help the company improve its topline. At the same time, Shopify has been able to improve the conversion of Gross Merchandise Value or GMV into revenue due to better services. Shopify’s GMV has increased 11x between the last quarter of 2016 and the last quarter of 2022. During this time, Shopify’s quarterly revenue base has increased from $130 million to $1.7 billion or 13x. Shopify’s GMV for 2022 was $195 billion and rapid growth in this key metric should help the company improve monetization. The company has also undertaken some cost-cutting which is having a positive impact on the bottom line. Analysts have forecasted Shopify’s EPS at $1 for fiscal 2025 which means that the stock is trading 60 times the EPS estimate of 2025. However, better monetization and focus on cost optimization could help the company deliver good EPS growth in the next few quarters. The PS ratio is also at 12 which is significantly lower than the pre-pandemic years. Shopify stock can deliver good returns in the long term as the company adds new services and improves its GMV growth trajectory. Shopify reported a GMV of $5.5 billion in December 2016 quarter. This has increased to $60 billion in the recent December 2022 quarter. Hence, Shopify’s GMV has increased to 11 times within the last seven years. On the other hand, Shopify’s revenue during the December quarter has increased by 13 times, from $130 million to $1.7 billion. This growth trend shows that the company is able to convert more GMV into actual revenue. One of the main reasons behind this trend is that Shopify is adding new services and it can charge customers a higher commission for these services. Shopify’s GMV for 2022 was a staggering $195 billion. The company has been able to reignite revenue growth in the last few quarters. The YoY revenue growth hit a bottom of 15% in June 2022. Since then the YoY revenue growth has picked up again as the company faces easier comps. In the recent quarter, the company reported YoY revenue growth of over 30% which is quite high when we consider that the GMV base of Shopify is more than $200 billion. The revenue growth will not build a bullish momentum for the stock unless the company can deliver sustainable profitability. During the pandemic years, Shopify’s revenue growth and high EPS helped the stock reach its peak. The company would need to focus on profitability in the next few quarters in order to rebuild a long-term bullish rally. Shopify has divested from its logistics business which should help improve the bottom line. We should also see better monetization of current services as the company tries to build new AI tools. The EPS estimates for 2 fiscal years ahead have steadily improved in the last few quarters. According to current consensus, Shopify should be able to deliver EPS of $1 in fiscal year 2025. However, it is highly likely that Shopify will beat these estimates as the company launches new initiatives to improve monetization of its massive GMV base. Shopify’s trailing twelve months EPS during the peak of the pandemic went to $2.6. If the company can get close to this EPS rate by 2025, we should see a significant bullish run in the stock. The recent cost-cutting should also help the company improve the bottom line. We have seen a similar trend in all the Big Tech companies who have reported a rapid growth in EPS as their headcount was reduced. While most analysts agree over the long-term revenue growth potential of Shopify, some of them are wary of the pricey valuation of the stock. Shopify is trading at 12 times its PS ratio. This is quite high when we compare with most of the other tech players and even Shopify’s peer like Wix (WIX), Etsy (ETSY), and others. However, it should be noted that Shopify’s PS ratio is significantly lower than the average PS multiple prior to the pandemic when the stock had an average PS ratio of over 20. Shopify’s revenue estimates for 2 fiscal years ahead is close to $10 billion which is equal to annualized revenue growth of over 25%. If we look at this metric, Shopify stock is trading at 7 times the revenue estimate of fiscal year 2025. This looks reasonable if the company can also manage to improve its EPS trend over the next few years. The long-term tailwind from ecommerce growth is still very strong. Shopify will benefit from an increase in GMV and a higher ecommerce market share in key markets. This should help the company gain pricing leverage over other competitors and also improve its monetization momentum Shopify has reported a faster revenue growth rate compared to its GMV growth in the last few years. This shows that the company is able to charge higher rate for additional services. There has been an acceleration in revenue growth over the last few quarters. Shopify has also divested from logistics services which were pulling down the profitability of the company. Shopify could deliver over 20% YoY revenue growth for the next few years as the company gains from strong tailwinds within the ecommerce business. If Shopify regains its earlier ttm EPS of $2 by 2025, we could see a strong bull run within the stock. While the stock is not cheap, it seems to be reasonably valued and longer-term investors could gain a better return from Shopify, making the stock a Buy at current price.
NYSE:SHOPLong
by moonypto
2
Walt Disney Co | DISThe Walt Disney Company is reportedly exploring options to sell or find a joint venture partner for its India digital and TV business, reflecting the company's ongoing strategic evaluation of its operations in the region. The talks are still in the early stages, with no specific buyer or partner identified yet. The outcome and direction of the process remain uncertain. Internally, discussions have commenced within Disney's headquarters in the United States as executives deliberate on the most viable course of action. These deliberations signify the company's willingness to adapt and optimize its business operations to align with changing market dynamics. The Wall Street Journal reported on July 11 that Disney had engaged with at least one bank to explore potential avenues for assisting the growth of its India business while sharing the associated costs. This approach suggests a proactive stance by the company to explore partnerships or arrangements that can drive growth while minimizing financial burdens. While it is too early to ascertain the exact direction this exploration will take, the developments in Disney's India business warrant attention, as they may shape the future landscape of the company's presence in this all-important region. The ongoing shift from traditional TV to streaming has placed Disney and its competitors in a costly and transformative phase. As part of this transition, Disney is actively cutting costs amid macroeconomic challenges that have impacted its advertising revenue and subscriber growth. CEO Bob Iger has been at the forefront of these changes, and his contract was recently extended through 2026 to allow him sufficient time to make transformative changes while strengthening the bench with future leaders of the company. One of the key considerations for Disney is evaluating its portfolio of TV networks, including ABC and ESPN. Bob Iger has expressed a willingness to be expansive in assessing the traditional TV business, leaving open the possibility of selling certain networks while retaining others acknowledging that networks like ABC may not be core to Disney's new business model. ESPN, as a cable TV channel, is being approached differently. Disney is open to exploring strategic partnerships, such as joint ventures or offloading ownership stakes, to navigate the challenges faced by the sports network. CEO Iger, who had previously expressed pessimism about the future of traditional TV, has found the situation to be worse than anticipated since his return to Disney. Although the linear networks segment, which accounts for Disney's TV properties such as ABC, National Geographic, FX, and FreeForm, has struggled to grow in the recent past, this segment is still an important part of the company's business, which is evident from the positive operating income reported by this segment in fiscal 2022. As below data reveals, the DTC business and content licensing made operating losses in FY 2022 which were offset by the operating income reported by linear networks. For this reason, investors will have to closely monitor a potential sale of TV assets to evaluate the impact of such a decision on Disney's profitability. The broadcasting landscape is experiencing a significant shift, with uncertainties surrounding its future and the changing nature of consumer preferences. While linear television channels are not expected to disappear immediately, their consumption continues to decline as viewers increasingly favor OTT platforms. This transition represents a fundamental trend shaping the industry. In terms of business models, subscription video-on-demand (SVOD) services will continue to grow with targeted advertising. As the ascent of streaming video continues, cable, satellite, and internet TV providers in the United States faced their most significant subscriber losses to date in the first quarter of 2023. Analyst estimates indicate a collective shedding of 2.3 million customers during this period. Consequently, the total penetration of pay-TV services in occupied U.S. households, including internet-based services like YouTube TV and Hulu, dropped to its lowest point since 1992, standing at 58.5%, according to Moffett's calculations. In Q1, pay-TV services in the U.S. witnessed a nearly 7% decline in customers compared to the previous year, with cable TV operators experiencing a 9.9% decline, while satellite providers DirecTV and Dish Network registered subscriber losses of 13.4%. Virtual MVPDs, which are multichannel video programming distributors, also suffered significant losses, shedding 264,000 customers during the quarter. Comcast, the largest pay-TV provider in the country, lost 614,000 video customers in Q1, and Google's YouTube TV was the only tracked provider to experience subscriber growth, adding an estimated 300,000 subscribers during the period. These trends illustrate the challenges faced by the pay-TV industry, with factors like increasing sports-broadcast fees driving retail prices higher, leading to cord-cutting and subsequent price adjustments by distributors. By 2026, e-Marketer predicts that the number of non-pay TV households will surpass pay TV households by over 25 million. In efforts to achieve profitability in the streaming business, Disney has implemented significant cost-cutting measures, including saving $5.5 billion through cost reductions and layoffs, and a focus on making Disney+ and Hulu more profitable. Disney aims to enhance Hulu integration, seeing it as a vital component of the company's transition from TV to a streaming-only model. Discussions are also underway for Disney to acquire Comcast Corporation's (CMCSA) stake in Hulu, as Disney currently holds 66% ownership. The company believes that the integration of Hulu and Disney+ will bolster the streaming business and contribute to its profitability. While the negotiations with Comcast over Hulu's valuation are ongoing, the combined offering of Disney+ and Hulu is expected to be available to consumers by the end of the calendar year. Although Disney's plans for ESPN+ and the fate of its other cable channels, such as the Disney Channel, remain uncertain, Bob Iger expects ESPN to eventually move to a streaming-only model, acknowledging the disruptive nature of the traditional TV business model. The discussions surrounding Walt Disney's TV and streaming business in India come at a critical juncture for the company, as it grapples with intensified competition and significant challenges in the market. The emergence of Reliance Industries' JioCinema streaming platform has posed a considerable threat to Disney's dominance, especially after Reliance secured digital rights for the highly popular Indian Premier League cricket tournament. This strategic move by Reliance, which offered free access to the tournament earlier this year, caused a substantial decline in Disney+ Hotstar's subscribers, a popular streaming service under Disney's India business. Additionally, Viacom18, which is backed by Reliance and Paramount Global (PARA), made a significant impact on Disney's market position in India. Through its partnership with Warner Bros, Viacom18 secured content rights to popular shows on HBO including Succession, previously aired on Disney's platform. This collaboration forms a formidable alliance challenging Disney's dominance in the Indian market. Reliance's freemium model poses the most significant threat to Disney's current position. By offering content for free on its streaming platform, JioCinema attracted a substantial number of subscribers through the broadcast of IPL. With its ample cash reserves, Reliance has the advantage of focusing on subscriber growth without immediately focusing on monetization strategies. The loss of streaming rights for the IPL, combined with a subsequent decline in paid subscribers, had a profound impact on Disney's reputation in India in the first quarter of this year, which could very well be the most challenging Q1 Disney has had in India for a long time. A report on video consumption trends in India by Media Partners Asia sheds light on the dynamic landscape of the online video sector in India. For the 15 months that ended in March 2023, total consumption across the online video sector reached a staggering 6.1 trillion minutes. During this period, Disney+ Hotstar emerged as the dominant player in premium VOD, capturing 38% of viewing time. The report attributes Hotstar's success to its strong sports offerings and the depth of its Hindi and regional entertainment content. During the survey period, Zee and Sony together held a 13% share of the Indian premium video sector viewing time. While the two companies are expected to merge pending regulatory approval, they are projected to operate independently for another year, benefiting from strong engagement across sports as well as regional, local, and international content. Prime Video and Netflix, Inc. (NFLX) collectively accounted for a 10% share of viewership in the premium VOD category. Prime Video also garnered a significant portion of viewership from regional Indian titles. The report emphasizes that local content dominates premium VOD viewership, particularly outside the sports category, while international content leads paid tiers. Catch-up TV is prevalent in the free tier across freemium streaming platforms. Although Disney was the clear winner in 2022, this report highlights a significant shake-up in the market brought about by the transformation of JioCinema. JioCinema, which previously held a mere 2% share of the premium video market, experienced a major upswing in growth since April. This surge can be attributed to JioCinema's decision to offer free live streaming of the popular IPL cricket tournament, a property that was previously exclusive to Disney-owned media in India. Despite technical glitches impacting user experience, JioCinema witnessed a more than 20-fold increase in consumption in April 2023, enabling it to dominate the premium VOD category. The report raises questions about JioCinema's ability to sustain this growth and scale in the absence of IPL action after June 2023. That being said, this could be an early indication of growth challenges Disney-owned brands may face in India. Star India, now known as Disney Star following the rebranding last year, is expected to experience a revenue drop of around 20% to less than $2 billion for the fiscal year ending September 2023. Additionally, EBITDA is projected to decline by approximately 50% compared to the previous year. Furthermore, Hotstar is estimated to lose 8 to 10 million subscribers in its fiscal third quarter as well. Given the current scenario, finding an outright buyer for Disney's India business is expected to be challenging. When Disney acquired the entertainment assets of 21st Century Fox in 2019, the enterprise value of the Indian business was estimated at around $15-16 billion. This high valuation, coupled with the intense competition and declining subscriber base, presents a complex landscape for potential buyers or partners. I believe Disney stock is attractively valued today given that the company's streaming business has a long runway for growth internationally while its brand assets will continue to drive revenue higher. As an investor, I am both concerned and curious about what the future holds for Disney's linear networks segment. Going by the recent remarks of CEO Iger, major changes are on their way. A strategic decision to divest non-core assets, in my opinion, will trigger a positive response from the market. That being said, a major divestment of TV assets could materially impact the company's profitability in the next 3-5 years until its streaming business scales enough to replace lost revenue from the linear networks segment. Investors will have to closely monitor new developments to identify a potential inflection point in Disney's story.
NYSE:DIS
by moonypto
4
WALMART: Forming a Megaphone Top. Sell signal.Walmart is fairly bullish on its 1D technical outlook (RSI = 59.199, MACD = 0.980, ADX = 43.049) as the price is near the top of the 2024 Bullish Megaphone and has been forming a top since the September 16th High. This slowdown can be seen on the two prior top formations and is more obvious on the 1D RSI which prints a Channel Down when the price peaks on a Channel Up. This Bearish Divergence is the signal we need to go short next week. We aim for just under the 1D MA50 (TP = 77.50) or take the profit if the RSI hits the buy entry line first. See how our prior idea has worked out: ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
NYSE:WMTShort
by InvestingScope