S&P 500 stock Advanced Micro Devices (AMD) along with Samsara (IOT), Cloudflare (NET), DraftKings (DKNG) and Floor & Decor (FND) are in focus this week.
XMajor indexes rose slightly to solidly last week amid some big daily swings. Recession fears, tamer inflation readings and Fed rate hike expectations are key factors, along with the start of earnings season.
Even more than the market, sectors and individual stocks are prone to big swings. With this in mind, these five stocks to watch offer investors a variety of options across multiple sectors — including computer software, chips, gambling and building supplies.
S&P 500: Samsara Stock
IOT shares stock 4.8% to 19.92 for the week, finding support at the 21-day line. Samsara stock is up 60.3% on the year.
Samsara more than doubled from early January to early March, including a 15% pop on March 3 following fiscal Q4 earnings. IOT stock now has a new base with a21.59 buy point, according to MarketSmith analysis. Investors could also use 20.36 as an early entry.
The San Francisco-based Samsara was founded in 2015 and began by selling fleet management software in the transportation industry. Leveraging Global Positioning System, or GPS, technology along with telematics — sensor data gathered from trucks — Samsara helped customers monitor routes and vehicle performance so they could save money on preventive maintenance and fuel usage.
From there, Samsara in 2018 expanded into video-based safety products. Now Samsara offers subscription services for vehicle telematics and video-based safety. Outside of transportation, it's focused on sectors such as energy and manufacturing, food and beverage, and state and local governments.
On March 3, Samsara stock surged on fourth-quarter earnings and revenue that topped Wall Street targets. The company reported a loss of 2 cents per share on an adjusted basis vs. a 5-cent loss a year earlier. Meanwhile, revenue rose 48% to $186.6 million.
On the year, Samsara had a loss of 13 cents per share on $652 million in revenue. Analysts expect a loss of 7 cents per share in 2023 with sales increasing 30% to $846.3 million, according to FactSet.
Samsara stock sits 17th in IBD's Computer Software-Enterprise industry group. IOT shares have an 91 Composite Rating out of 99. Samsara stock has an 98 Relative Strength Rating. The EPS Rating is 55 out of 99.
Cloudflare Stock
NET shares surged 9.5% this week to 64.68, standing out as many software names slashed gains or reversed lower. Cloudflare stock has jumped 43.1% so far in 2023 and has formed a cup base with an official 72.51 buy point.
That buy point is 10 cents above its Feb. 15 high. However, investors could use 63.19 as an early entry.
Started in 2009, San Francisco-based Cloudflare speeds up and provides security for web applications routed through its intelligent global network. The company reports that in 2022, around 20% of the Internet uses Cloudflare's security services.
Cloudflare reports Q1 2023 financials after the market closes on April 27. Analysts expect EPS growing 300% to 4 cents per share, up from 1 cent per share a year ago. Wall Street sees sales increasing 6% to $291 million.
On Feb. 9, Cloudflare topped Q4 earnings and revenue estimates. The company earned 6 cents per share, up from flat profits a year ago. Meanwhile, revenue in the fourth quarter advanced 42% to $275 million.
Cloudflare stock ranks 14th in IBD's Computer Software-Enterprise industry group. NET shares have an 93 Composite Rating out of 99. Cloudflare stock has an 93 Relative Strength Rating. The EPS Rating is 78 out of 99.
DraftKings Stock
DKNG shares advanced 3% to 18.71 this week, bouncing from the 50-day line. The stock has skyrocketed 64% since the beginning of 2023.
DraftKings stock is in consolidation with an official 21.72 buy point. Aggressive investors could use a move above its March 31 high of 19.67 as an early entry.
The Boston-based sports-gambling enterprise went public with the DKNG ticker in April 2020. DraftKings still hasn't turned a profit, and analysts expecting that to continue until 2026. Institutional investors remain skeptical of DraftKings stock, with nearly 300 funds jumping ship in 2022, according to MarketSmith.
However, sports-betting prospects look strong with around 2o% of U.S. adults saying they bet money on sports in some way in the last 12 months, according to a 2022 Pew Research Center survey. The American Gaming Association reports that commercial betting industry saw record revenue in 2022.
On Feb. 16, DKNG topped fourth-quarter estimates, reporting a smaller-than-expected loss. The company lost 53 cents per share vs. an 80-cent loss a year earlier. Meanwhile, DraftKings Q4 revenue grew 81% to $855 million.
On the year, DraftKings reported a loss of $3.16 per share as revenue grew 73% to $2.24 billion. Analysts see DraftKings revenue growth continuing, averaging an annual increase of 22% through 2026.
DraftKings stock ranks sixth in IBD's Leisure-Gaming/Equip industry group. DKNG shares have an 90 Composite Rating out of 99. DraftKings stock has a 96 Relative Strength Rating. The EPS Rating is 46 out of 99.
S&P 500: Advanced Micro Devices Stock
AMD shares dipped 0.8% to 91.75 last week. Advanced Micro Devices stock has dropped around 11% from its March 23 high of 102.43.
AMD stock technically is back in buy range of an 89.04 buy point from a flat base, but it's in danger of round-tripping a double-digit gain. Still, the pullback has been on light volume. A decisive move above the recent downtrend could offer an early entry.
S&P 500 stock AMD competes with Intel (INTC) in making central processing units, or CPUs, for personal computers and servers. It also rivals Nvidia (NVDA) in the market for graphics processing units, or GPUs, for PCs, gaming consoles and data centers.
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Founded in May 1969, AMD went public in September 1972. AMD shifted to a fabless semiconductor business in March 2009 by spinning off its factories as GlobalFoundries (GFS). Chip foundry Taiwan Semiconductor Manufacturing (TSM) produces AMD's chips.
On Jan. 31, AMD delivered a mixed fourth-quarter report. It posted better-than-expected results but gave soft sales guidance for the current quarter, citing a continued weak PC market. AMD stock jumped 12.6% after the report, which highlighted strong data center chip sales.
The S&P 500 chipmaker earned an adjusted 69 cents a share on sales of $5.6 billion in the December quarter. On a year-over-year basis, AMD earnings fell 25% while sales rose 16%.
For Q1, Wall Street expects AMD earnings per share falling 50% to 57 cents per share with revenue forecast to fall 10% to $5.32 billion.
Advanced Micro Devices stock ranks eighth in IBD's Electric-Semiconductor Fablss industry group. This S&P 500 stock has an 98 Composite Rating. Its Relative Strength Rating is 93. AMD has an EPS Rating of 80.
Floor & Decor Stock
FND advanced 6.5% to 98.41 on the week. Floor & Decor stock has shot up 41.3% since the beginning of the year.
FND has formed a cup-with-handle pattern with an official 99.47 buy point, according to MarketSmith analysis. Floor & Decor stock was been flirting with that entry in recent days.
The Atlanta-based flooring retailer topped Q4 earnings but missed sales views on Feb. 23. FND EPS dropped 4% to 64 cents per share while sales grew 15% to $1.05 billion. On the year, FND earnings jumped 13% to $2.76 per share. Revenue grew 24% to $4.26 billion.
Floor & Decor's breadth of supply and everyday low prices helped it win more professional contractor customers. Pros accounted for more than 40% of sales last year, up from 35% in 2021.
FND added 32 warehouse stores last year and expects to open another 32 to 35 this year, up 17%-18%, while taking market share from the competition. The company sees total revenue rising 8%-11.5%. Adjusted EBITDA should grow 5%-12.7%.
Wall Street expects profits to drop around 2% in 2023 while sales are expected to increase 9% to $4.67 billion. The company expects comparable-store sales to be flat to down 3% this year.
Floor & Decor stock ranks first in IBD's Retail/Wholesale-Buildings Products industry group. FND has an 97 Composite Rating out of 99. Its Relative Strength Rating is 92. The EPS Rating is 97 out of 99.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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