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5 Stocks That Could Be the Next Amazon

Amazon.com, Inc. (NASDAQ:AMZN) has been one of the more impressive stocks of the past 25 years. In fact, AMZN now has returned nearly 100,000% from its IPO price of $18 ($1.50 adjusted for the company’s subsequent stock splits).

A large part of the returns have come from two factors. First, Amazon has vastly expanded its reach. What originally was just an online bookseller now has its hands in everything from cloud computing to online media to groceries. And its shadow is even larger. A potential entry by Amazon has rattled pharmacy stocks and medical distributors, among others.

Secondly, as a stock, AMZN has managed the feat of keeping a growth stock valuation for over two decades. I’ve long argued that investors can’t focus solely on the company’s high P/E ratio to value Amazon stock. But however wise an investor might the current multiple is, the market has assigned a substantial premium to AMZN stock for over 20 years now.

It’s an impressive combination — and one that’s likely impossible, or close, to duplicate. But these five stocks have the potential to at least replicate parts of the Amazon formula. All five have years, if not decades, of growth ahead. New market opportunities abound. And while I’m not predicting that any will rise 100,000% — or 1,000% — these five stocks do have the potential for impressive long-term gains.

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5 Stocks That Could Be the Next Amazon Stock: JD.com (JD) 5 Stocks That Could Be the Next Amazon Stock: JD.com (JD)Source: Daniel Cukier via Flickr

JD.com Inc(ADR) (NASDAQ:JD) is the company closest to following Amazon’s model. While rival Alibaba Group Holdings Ltd (NYSE:BABA) gets most of the attention, it’s JD.com that truly should be called the “Amazon of China,” as Will Healy pointed out in December.

Like Amazon (and unlike Alibaba), JD.com holds inventory and is investing in a cutting-edge supply chain. It, too, is expanding into grocery, like Amazon did with its acquisition of Whole Foods Market. A partnership with Walmart Inc (NYSE:WMT) should further help its off-line ambitions. JD.com even is cautiously entering the finance industry.

That ability to both provide best-in-class logistics and satisfy a wide range of customer needs is what has made Amazon a success. And while JD may not rise to the scale of Amazon, at its current valuation it doesn’t have to. After a recent pullback, JD trades at less than 26x forward EPS. That’s despite 40% revenue growth in 2017, and expectations for a 30% increase in 2018.

And it sets up a scenario where JD stock could — if sentiment finally turns in its favor for good — appreciate for years, thanks to both strong bottom-line growth and an expanding multiple from optimistic investors.

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5 Stocks That Could Be the Next Amazon Stock: Square (SQ) 5 Stocks That Could Be the Next Amazon Stock: Square (SQ)Source: Chris Harrison via Flickr (Modified)

Admittedly, I personally am not the biggest fan of Square Inc (NYSE:SQ) stock. I like Square as a company, but I’ve questioned just how much growth is priced into SQ already.

Of course, skeptics have done little to dent the steady rise in AMZN stock. And valuation aside, there’s a clear case for Square to follow an Amazon-like expansion of its business. Back in January, Instinet analyst Dan Dolev compared SQ to AMZN and Alphabet Inc (NASDAQ:GOOGL, NASDAQ:GOOG), citing its ability to expand from its current payment-processing base:

In 10 years, Square is likely to be a very different company helped by accelerating share gains from payment peers and relentless disruption of services like payroll and human resources.

Just as Amazon used books to expand into e-commerce, and then e-commerce to expand into other areas, Square can do the same with its payment business. The small business space is ripe for disruption, as Dolev points out. Integrating payments into payroll, HR, and other offerings would dramatically expand Square’s addressable market – and lead to a potential decade or more of exceptional growth.

Again, I do question whether that growth is priced in, with SQ trading at ~about 12x the company’s 2018 guidance for “adjusted” revenue. But if — again, like AMZN — Square stock can combine a high multiple with consistent, impressive, expansion, it has the path to create substantial value for shareholders over the next five to 10 years.

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5 Stocks That Could Be the Next Amazon Stock: Shopify (SHOP) 5 Stocks That Could Be the Next Amazon Stock: Shopify (SHOP)Source: Shopify via Flickr

E-commerce provider Shopify Inc (NYSE:SHOP) probably doesn’t have quite the same opportunity for expansion as Square. And it too has a hefty valuation, along with a continuing bear raid from short seller Citron Research.

But I’ve remained bullish on SHOP stock — and here, too, a recent pullback presents a buying opportunity. Shopify is dominant in its market of offering turnkey e-commerce services to small businesses. That’s exactly where consumer preferences are headed: small and unique over large and bland. And because of offerings like Shopify (and Amazon Web Services), those small to mid-sized businesses can compete with the giants.

Meanwhile, Shopify does have the potential to expand its reach. Just 29% of revenue comes from overseas, a proportion that should grow over time. It’s moving toward capturing larger customers as well through its “Plus” program, picking up Ford Motor Company (NYSE:F) as one key client. The development of an ecosystem for suppliers and the addition of new technologies (like virtual reality) give Shopify the ability to offer more value to customers — and to take more revenue for itself.

Like SQ, SHOP is dearly priced. But both companies have an opportunity to grow into their valuations. And given long runways for Shopify’s adjacent markets, it should keep a high multiple for some to come. As a stock, if not quite as a company, SHOP has a real chance to follow the AMZN formula for long-term upside.

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5 Stocks That Could Be the Next Amazon Stock: Roku (ROKU) 5 Stocks That Could Be the Next Amazon Stock: Roku (ROKU)Source: Shutterstock

Roku Inc (NASDAQ:ROKU) might have the best chance of any company in the U.S. market to follow Amazon’s strategic playbook. The ROKU stock price is a concern: I wasn’t thrilled about the price after a huge post-earnings gain back in November, and even near a five-month low ROKU isn’t close to cheap.

But — perhaps even moreso than Square — Roku now isn’t what Roku is going to be in ten years. The hardware business is a loss leader, but one that allows Roku to serve as the gateway to content for millions of customers. As the company pointed out after Q4 earnings, it’s already the third-largest distributor of content in the U.S. The Roku Channel is seeing increasing viewership. The company offers pinpoint targeting of advertisements — without the messy data problems afflicting Facebook, Inc. (NASDAQ:FB).

Roku is becoming increasingly embedded in TVs, though a deal between Amazon and Best Buy Co (NYSE:BBY) raised some fears about those software efforts going forward. It has a plan to roll out home entertainment offerings like speakers and soundbars, creating a long-sought integrated experience. It could even, as it grows, look to develop or acquire content itself, positioning Roku not as just a conduit to Netflix, Inc. (NASDAQ:NFLX) but a rival.

The bull case for Roku stock is that its players are like Amazon’s books — a way to garner customers and get a foot in the door of the exceedingly valuable media business. What Roku does now that it has entered will determine the fact of ROKU stock. But the amount of options and a reasonable valuation (Roku’s market cap is barely $3 billion) mean that betting on its strategy could be a lucrative play.

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5 Stocks That Could Be the Next Amazon Stock: Nvidia NVIDIA Corporation Stock (NVDA) Won't Stay Down Long After Shocking Analysts Source: Shutterstock

In the context of the stocks chosen here, Nvidia Corporation (NASDAQ:NVDA) doesn’t seem particularly expensive. But in the context of the traditionally cyclical — and low-multiple — semiconductor space, a ~34x multiple to 2018 consensus EPS estimates, even backing out net cash, is awfully pricy.

And with NVDA up a whopping 1,550% in just the past five years, investors would be forgiven for thinking the run might come to an end. Indeed, NVDA stock hasn’t really moved over the past four-plus months.

But the huge amount of secular tailwinds behind Nvidia suggest that the company should be able to drive torrid growth for years to come – and to maintain a multiple that looks rather high on a historical basis. The company’s automotive business gets a fair amount of press, given its potential applications to autonomous driving. But that growth likely won’t come in earnest until the next decade.

It’s the datacenter business that looks most appealing in the near term. Revenue in that category more than doubled in 2017. Thanks to cloud providers like AWS, demand should continue for years to come. And with Nvidia taking share from Intel Corporation (NASDAQ:INTC), its growth should be even better than that of the market. High-end gaming demand should rise, and virtual reality will add another tailwind there.

Unlike, say, Roku (or early-days Amazon), Nvidia’s growth opportunities are mostly known. But at $223, even with a high multiple, they’re not fully priced in. I still see an easy path to $250 for NVDA in the near term. Longer-term, its presence (if not outright dominance) of key markets should lead Nvidia stock to double, at least.

As of this writing, Vince Martin has no positions in any sec

3 Pervasive Cryptocurrency Conundrums

In 2017, the cryptocurrency market was practically unstoppable. Over the course of the year, the combined market cap of all virtual currencies soared almost $600 billion, which in percentage terms, equates to more than 3,300%. It may very well go down as the most impressive 12-month return for an asset class we’ll ever witness.

But this year has seen a major reversal. After peaking in market cap at $835 billion on Jan. 7, cryptocurrencies have plunged to less than $250 billion, representing a 70% collapse in value. Virtually no digital currencies have been spared, with some, such as Ripple, nearing losses of 90% over the past three months.

A confused businessman in a suit scratching the top of his head.

Image source: Getty Images.

However, volatility isn’t the only thing that’s reared its head in recent months. A number of pervasive cryptocurrency conundrums have taken hold, leading to growing levels of uncertainty, and even adversely impacting a select few publicly traded stocks. Here are three cryptocurrency conundrums that simply can’t be ignored.

1. The proof-of-concept conundrum

If there’s an issue that could be labeled as the biggest problem for cryptocurrencies, in my view, it’d be the proof-of-concept conundrum associated with blockchain technology.

For those unfamiliar, blockchain is the digital, distributed, and decentralized ledger responsible for recording transactions in a transparent manner without the need for a third party, such as a bank. In even plainer English, it’s a way to transmit funds and log data without the need for traditional banking networks. Its entire evolution was based on the perception that the current banking system was failing consumers by taking up to five business days to process transactions, as well as by allowing banks to pilfer transaction fees by acting as a third party. Blockchain resolves this by processing payments considerably faster (potentially in real time), as well as by eliminating banks from the equation, thusly reducing transaction fees.

This probably sounds great on paper, and it’s certainly attracted no shortage of enterprises that’ve been willing to test blockchain in demos and small-scale projects. The Enterprise Ethereum Alliance has gathered well over 250 organizations from around the globe to test a version of Ethereum’s open-source blockchain in various industries and settings.

A businessman looking at an encrypted blockchain on a digital screen.

Image source: Getty Images.

Yet, one issue remains: real-world scalability. Even though we’ve observed plenty of successful blockchain demos and projects, none have allowed blockchain to be tested in a broader-scale, real-world scenario. More importantly, no brand-name companies have, as of yet, decided to go all-in on blockchain and replace their existing networks.

The conundrum is this: Enterprises won’t switch to blockchain until it’s proven its real-world scalability — but there’s no way to prove this scalability if no big businesses make the switch. Until there’s some resolution to this catch-22, betting on blockchain remains a dangerous venture for investors.

2. The regulation conundrum

Another issue that might have cryptocurrency investors pulling their hair out is the regulation conundrum.

Since January, cryptocurrencies like bitcoin have taken it on the chin as certain countries have stepped up virtual-currency governance. As an example, in January, South Korea announced that banks would have to verify the identities of their members if their accounts were to be linked to cryptocurrency exchanges. In other words, if additional money was to be added, anonymity was no longer an option in South Korea.

A judge's gavel surrounded by binary code.

Image source: Getty Images.

In the U.S., we’ve witnessed a similar push toward transparency. The Internal Revenue Service (IRS) won a court case against well-known crypto exchange Coinbase in November, requiring the exchange to hand over info on users who’d traded in excess of $20,000 in bitcoin between 2013 and 2015. Since only 800 to 900 tax filings annually over those years made note of capital gains, it’s pretty evident the IRS is cracking down on virtual currency tax evasion. The passing of the Tax Cuts and Jobs Act, which eliminated like-kind exchanges, is further evidence of the United States’ push to make the virtual currency landscape more transparent.

When cryptocurrencies were first pushed into the spotlight, it was their anonymity that drew investors to them. They were viewed as a libertarian’s dream currency. But with regulation stepping up, many digital currencies have sold off.

The conundrum is this: In order for cryptocurrencies to be taken seriously, and for them to have a long-term future, there needs to a foundation of regulation. Yet, this regulation works against the very core principle that attracted investors to virtual currencies in the first place. Balancing the need for regulation and the desire for independence is going to be difficult.

3. The cryptocurrency mining conundrum

Finally, there’s a real headscratcher that graphics card producers NVIDIA (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) have to come to terms with regarding cryptocurrency mining.

Hard drives being used to mine cryptocurrency.

Image source: Getty Images.

Cryptocurrency mining describes one of the more common processes by which blockchain transactions are verified. It involves people or businesses with high-powered computers competing against one another to be the first to solve complex mathematical equations that are the result of the encryption designed to protect those transactions from hackers. The first to solve these equations and validate a group of transactions, known as a block, is given a “block reward.” This reward is paid out in the tokens of the cryptocurrency that’s being mined, and it’s how crypto miners make their money.

Not all virtual currencies are mineable, but bitcoin, Ethereum, Bitcoin Cash, and Litecoin, four of the five largest by market cap, are indeed mined. Mining is a highly intensive process since it uses a lot of electricity, as well as some serious hardware. For bitcoin, we’re talking about specialized ASIC (application-specific integrated circuit) chips, with graphics processing units being used in other mineable cryptocurrencies.

Now, here’s the conundrum: Graphics card prices have doubled, tripled, or even quadrupled as a result of demand for cryptocurrency mining. That’s been a nice boon for NVIDIA and AMD, but it’s really ticking off their core graphics card customers, who are either video-game enthusiasts or businessmen/businesswomen. NVIDIA and AMD have to decide whether they’ll do nothing and let supply and demand dictate pricing, which could cause them to lose some of their core customers, or launch crypto-specific graphics cards for mining and lessen the recent surge in revenue they generated from the mining craze. It’s really a no-win situation for either company.

Uber Technologies Inc. Is a Massive Risk for Softbank

Uber Technologies Inc. has been valued at $48 billion after Softbank Group Corp. (OTCMKTS:SFTBF) has completed its purchase of 20% of the ride-hailing company.

A previous private funding round said the company was worth $68 billion, making this new round a “down round.” Anyone who bought shares at the $68 billion valuation — and then sold to Softbank — took a loss.

Since most of those exiting were early investors, however, they have taken huge profits. Founder and former-CEO Travis Kalanick sold 29% of his personal stake to Softbank and is now a billionaire. Menlo Ventures, First Round Capital and Benchmark Capital were also among the early backers to take profits. 

Kalanick ran Uber from a startup to a dominant player in the new world of app-based ride-hailing, which has been putting taxi services out of business around the world. But the company now faces challenges from well-heeled competitors and governments bent on regulating or even banning it.

Can Uber Be Saved?

The Softbank deal was designed to put a period on Uber’s past troubles and re-launch the company with $1.25 billion of fresh capital.

Uber tried further distract by announcing on January 7 that they have testing self-driving car chips from Nvidia Corp. (NASDAQ:NVDA), and will use them in their fleet of autonomous vehicles.

Former Expedia Inc. (NASDAQ:EXPE) CEO Dara Khosrowshahi is now in charge at Uber. He hopes to make people forget a hellish year during which the company faced allegations of sexual harassment, a backlash by government regulators, a “delete Uber” campaign, and revelations that it paid to cover up a massive data breach.

A lawsuit filed by Alphabet Inc. (NASDAQ:GOOGL) last February may be the company’s greatest headache. Google is accusing their former employee, Anthony Levandowski, of taking trade secrets from the Waymo self-driving car unit to Uber with him.

That trial has been delayed by the discovery of a letter from former Uber employee Ric Jacobs which alleged that Kalanick personally directed the theft of Waymo’s technology and spied on competitors. 

Is Uber Worth Saving?

Make no mistake. There is something worth saving at Uber, a service that powered 4 billion car rides in 2017. The company has a huge infrastructure, thousands of drivers, and enough brand loyalty to make the word “uber” a verb.

Khosrowshahi has recruited Barney Harford, former CEO of Orbitz — which Expedia bought in 2013 — as the new chief operating officer. Harford is charged with cutting costs so Uber can look profitable in an initial public offering planned for 2019. The company lost nearly $2.5 billion during the middle quarters of 2017 and has yet to announce its fourth-quarter results.

Along with their purchase, Softbank has brought Sprint Corp. (NYSE:S) CEO Marcelo Claure and Rajeev Misra, who runs Softbank’s $100 billion “Vision Fund,” to the Uber board, which now numbers 17 people. Softbank controls Sprint, which has pre-loaded Uber’s app onto its phones in the past.

The Bottom Line

Bigger than all of Uber’s other problems is the fact that its backers were greedy.

They delayed their planned IPO long enough for the company attracted big competitors like Didi Chuxing, a Chinese clone that claims to have powered 7.3 billion rides last year and driven Uber from that market.

Uber has also remained private through government backlash. Taxicab companies and liberal groups claim that Uber used private capital to subsidize the elimination of good (often union) jobs.

The City of London has refused to renew Uber’s operating license, adding itself to the list of places where Uber is banned. This list now includes Denmark, Bulgaria, and Hungary, as well as parts of the U.S., Canada, Australia and many European countries.

My own view is that Uber has missed its moment. And Softbank is going to find it got into the business too late. The Google lawsuit takes Uber out of the self-driving car market, Didi is going to keep it out of most of Asia, and politicians are going to war against it.

That is not a good position to be in. This is a corporate turnaround with all the risks of a venture capital investment. The Softbank “Vision Fund” may prove short-lived if Uber fails.

Dana Blankenhorn is a financial and technology journalist. He is the author of the historical mystery romance The Reluctant Detective Travels in Time available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this story.

 

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4 Stocks Feeling Friday’s Bitcoin Burn

The meteoric rise of bitcoin has been incredibly publicized this year, ultimately warranting a futures index on the CME. While just a few years ago only a handful of people really dealt in bitcoin, its now become much more mainstream, not only as a currency but people are now treating it more like an asset and adding it to their portfolios.

Despite this popularity among investors, many market analysts and big Wall Street names have decried this cryptocurrency as straight up gambling. And in Fridays session, bitcoin crapped out, losing roughly one-third of its cap.

Bitcoin prices plunged below $11,000 on Friday, after having risen as high as roughly $20,000 within the past week. For some perspective on how fickle bitcoin is: the price of one bitcoin was less than $900 at this time last year.

While this drop definitely will hurt those retail investors already in bitcoin, there are quite a few companies that will be feeling the sting as well. While there might not be much news on these equities ahead of Christmas, the shift in bitcoin has been moving the needle for these stocks in this time.

24/7 Wall St. is watching some of these stocks with the biggest exposure to bitcoin and how they reacted to Fridays fumble.

Advanced Micro Devices Inc. (NASDAQ: AMD) slipped on Friday in response to bitcoin falling. The connection: AMD graphics cards are used in cryptocurrency mining rigs. While there hasnt been much of a correlation in 2017, the stock has more than tripled since the end of 2015. Shares of AMD were last seen down about 4% at $10.41, with a consensus analyst price target of $14.47 and a 52-week trading range of $9.42 to $15.65.

NVIDIA Corp. (NASDAQ: NVDA) has been the darling of the tech sector for a couple of years now, seeing incredible growth just like AMD in this time. It is another producer of high-powered graphics cards that are used in the mining of bitcoin, not to mention it has forays into artificial intelligence and gaming. Shares of NVIDIA were trading down about 2% at $192.30 on Friday. The stock has a 52-week range of $95.17 to $218.67 and a consensus price target of $213.50.

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Down 34% in a Week, Bitcoin HODLers Don’t Flinch

Square Inc. (NYSE: SQ) is known as a payment processing service for small-to-medium business operations. In November, Square announced that it was letting a small amount of its Cash app users buy and sell bitcoin on its platform. While this is only took place in November, Square is up about 160% year to date with a heavy correlation to bitcoin. There is still much speculation about how bitcoin could integrate with Squares platform. Shares of Square were trading down 3% at $34.75, with a 52-week range of $13.53 to $49.56 and a consensus price target of $40.00.

Overstock.com Inc. (NASDAQ: OSTK) is the first major retailer to accept cryptocurrencies, with bitcoin, litecoin and ethereum among them. This was only announced over the summer, but since then the stock has skyrocketed over 300%. Shares of Overstock were trading at $63.00, with a 52-week range of $13.75 to $82.70 and a consensus price target of $85.00.

Mondays Vital Data: Teva Pharmaceuticals, Inc. (TEVA), Oracle Corporation (ORCL) and Nvida Corpor

U.S. stock futures are in rally mode this morning, with Dow Jones Industrial Average futures up more than 100 points in premarket trading. Tax plan optimism is the big driver heading into the week before the holiday break, as Republican’s now appear to have the votes to pass the much anticipated legislation.

stock market todaySpecifically, Treasury Secretary Steven Mnuchin said over the weekend that he has no doubt that the Republican tax plan will make it to the president’s desk this week, after Senators Bob Corker (R-Tenn.) and Marco Rubio (R-Fl.) ended their holdouts and said they’d support the bill.

Against this backdrop, Dow futures have soared 0.64%, S&P 500 futures have climbed 0.37% and Nasdaq-100 futures have jumped 0.37%.

On the options front, volume was over the top on Friday, with more than 24.2 million calls and 17.7 million puts changing hands on the session. Traders, it appears, are already preparing to go on break as the holiday season draws to a close. As for the CBOE, the single-session equity put/call volume ratio rose to 0.57, while the 10-day moving average ticked higher to 0.59.

Turning to Friday’s options activity, Teva Pharmaceutical Industries Ltd (ADR) (NASDAQ:TEVA) was upgraded at Credit Suisse for announcing layoffs, but Israel’s largest labor union effectively shut the country down for half a day in protest. Elsewhere, Oracle Corporation (NASDAQ:ORCL) drew mixed options activity after a poorly received quarterly earnings report. Finally, Nvidia Corporation (NASDAQ:NVDA) rallied following a bullish note on GPU makers and cryptocurrencies.

Monday’s Vital Options Data: Teva Pharmaceuticals, Inc. (TEVA), Oracle Corporation (ORCL) and Nvida Corporation (NVDA)investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-300×138.png 300w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-65×30.png 65w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-200×92.png 200w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-400×183.png 400w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-116×53.png 116w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-100×46.png 100w,https://investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-109×50.png 109w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-78×36.png 78w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-170×78.png 170w” sizes=”(max-width: 552px) 100vw, 552px” />

Teva Pharmaceutical Industries Ltd (ADR) (TEVA)

TEVA stock surged more than 7% on on Friday after Credit Suisse upgraded the shares to “neutral” from “underperform” and lifted its price target to $20 from $8. The brokerage firm praised Israel-based Teva’s plan to layoff 10,000 employees as a positive turnaround move for investors.

However, the layoffs had the unintended consequence of practically shutting down Israel for half a day. The country’s biggest labor union went on strike for half of Sunday, closing the airport, stock exchange, banks and all government ministries in protest of the mass layoffs.

TEVA options traders clearly focused on the positives for the country. Volume topped 226,000 contracts, with activity rising to roughly 2.6 times TEVA’s daily average. Calls made up 60% of the day’s take. That said, January 2018 options activity reveals a bit of profit taking on TEVA.

Specifically, the January 2018 put/call open interest ratio rose last week from 0.55 on Monday to 0.64 as of this morning. Call volume remained heavy throughout the week, meaning that existing call positions were closed for a profit, or traders rolled their positions higher and into a later month to benefit from continued gains.

Oracle Corporation (ORCL)

Oracle released its quarterly earnings report last week, and the results were not well received at all. The company topped quarterly earnings and revenue expectations, but issued guidance below Wall Street’s targets. Specifically, Oracle said it expected revenue growth of 2%-4% with adjusted earnings of 68-70 cents per share, below the analyst estimate of 72 cents.

Furthermore, cloud growth, while solid for Oracle, remained well below that of competitors Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ:AMZN).

But ORCL stock is up this morning after announcing that the company was buying Australia’s Aconex Ltd for $1.19 billion. Aconex specializes in web-based project management software that could help boost Oracle’s presence in business cloud offerings.

ORCL options traders were mixed on last week’s earnings performance. Volume spiked to 186,000 contracts, or nearly five times Oracle’s daily average. That said, calls only made up 55% of the day’s take, as puts gained momentum on ORCL stock.

Furthermore, the January 2018 put/call OI ratio indicates a fair amount of pessimism, arriving at 0.91. Currently, peak put OI for the series totals 45,000 contracts at the out-of-the-money $40 strike.

Nvidia Corporation (NVDA)

NVDA stock has taken a bit of a beating in the past month, as analysts fret of the implosion of demand from cryptocurrency miners. However, RBC Capital Markets thinks the risks are being overstated. According to the ratings firm, while bitcoin and ethereum will both see less mining demand, every other cryptocurrency on the market is still going strong. As a result, Nvidia should continue to see strong demand for GPUs to mine these other currencies.

NVDA options traders gobbled up the bullish news. Volume jumped to 174,000 contracts on Friday, with calls making up 61% of the day’s take. What’s more, the attention to calls could mark a reversal in sentiment for NVDA.

Currently, the January 2018 put/call OI ratio arrives at a lofty 1.18 for NVDA stock. However, this reading has trended lower in recent weeks, as traders banked off a rebound in NVDA stock. Additional leverage from analyst notes on cryptocurrency miners could add fuel to this fire, and help push NVDA steadily higher heading into 2018.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

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