This is the forum for Growth & Total Return discussion on Seeking Alpha. A new chat begins every two weeks, and all previous blogs are listed in chronological succession on the main chat page. We won’t be doing any comment cleanup in the new chat, and users will always be able to refer back to previous discussions
More on Today’s Markets:
Super Micro Computer, Inc. (NASDAQ:SMCI) investors are navigating one of the most challenging recent periods as the leading AI server maker attempts to recover its stock from its steep bear market plunge. Accordingly, SMCI’s market outperformance has collapsed, even as it still recorded a 1Y total return of more than 60%. However, the stock’s bearish sentiments have worsened, as it has plunged almost 70% from its March 2024 highs through this week’s lows.
In the Q1 earnings, Nvidia’s CFO mentioned that close to 50% of the data center revenue came from large cloud providers like Amazon’s (AMZN) AWS, Google Cloud (GOOGL) (GOOG), and Microsoft Azure (MSFT). Most of the recent growth in Nvidia’s revenue has been driven by these cloud companies trying to ramp up their AI services. But this has come at a cost of massive capex for even the larger companies. Most of these cloud companies have themselves seen a correction after recent earnings as Wall Street is worried over their capex trajectory. On the other hand, these large cloud providers are not showing a big improvement in their revenue and margin trajectory. If these large players scale back their investment over the coming quarters, we could see a big headwind for Nvidia’s revenue and margin.
CEMEX’s (NYSE:CX, OTCPK:CXMSF) Mexican segment continues to grow steadily as the company exits the first half of the year, which helped the topline deliver positive growth during the last quarter despite persistent weakness in other parts of the business. I expect the company’s top line to be under pressure as the demand environment remains soft in the Europe region. However, volume is expected to grow in the U.S. segment in the coming quarters, which along with strong pricing should fully offset the headwinds from other regions, resulting in a flat to slightly positive growth in 2024. Margins, on the other hand, remain good despite volume declines as pricing is strong and cost inflation decelerating in certain parts of the business, which along with expected volume growth should support margins in the coming quarter. While the long-term prospects also look promising, I would suggest buying this stock for the longer term.
Block’s (NYSE:SQ) commercial momentum is beating expectations: During Q2, the company managed to score a 20% YoY growth in gross profit, and an 81% YoY jump in adjusted EBITDA. Moreover, following strong results, Block raised its FY24 guidance, projecting a 15% YoY increase in gross profit to $8.65 billion and higher adjusted EPS. The company plans further growth through deeper integration of Afterpay and expanded Cash App services, aiming to grow its user base through increased marketing. Based on this optimistic outlook, I am revisiting my residual earnings model for SQ stock, and I am now calculating a fair implied target price equal to $112.
Chart Industries (NYSE:GTLS) is a company that began with a sole focus on “big LNG.” But that has materially changed through acquisitions. Now the company is selling to some of the hottest “green” energy markets as well. Data centers are the latest announced venture into desirable industries to sell to. This marks a big departure from the original business of oil and gas. But it sticks to the company strategy of handling any gas (in this case air). Surprisingly, the company’s products are finding a wide variety of uses that are leading to rapid growth well into the future.
Aena (OTCPK:ANYYY) has seen its share price increase by over 26% since the release of Q2 2024 earnings results. Despite some headwinds, including the suspension of the Barcelona-El Prat airport extension and increased operational expenses, I believe Aena has room to grow considering its strong fundamentals. In this article, I will go through the recent challenges and political pressures that the company is currently experiencing, including some of the drivers for the increase in operational expenses.
Moderation Guidelines
We will only remove comments under the following categories:
-
Personal attacks on another user
-
Stereotyping, prejudiced or racist language about individuals or the topic under discussion
-
Inciting violence messages, encouraging hate groups, and political violence
-
Spam
For any issue with regards to comments please email us at: moderation@seekingalpha.com.
Seeking Alpha’s Disclosure
Past performance does not guarantee future results. Content is provided for information purposes only and does not constitute investing advice. Any views or opinions expressed do not reflect those of Seeking Alpha as a whole. Seeking Alpha does not take account of your objectives or financial situation and does not offer any personalized investment advice. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank.
