The Ultimate Blueprint for Achieving Financial Stability!
By Joanne Cassar / 23. Nov 2023
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By Helneski / 07. Aug 2022
In a recession, investors tend to flock to dividend stocks as capital gains growth is difficult to achieve and the payout provides an offsetting income stream. Particularly in an inflationary environment, dividends can help mitigate the pressure stocks come under.
What stocks gained the most today? How do they compare with shares of companies that have given the highest return in the past week?
Amazon Inc (AMZN) is a technology company that immerses itself in e-commerce, cloud computing, digital streaming, and artificial intelligence.
Amazon Inc is one of the biggest American Technology companies such as Alphabet, Apple, Meta Platforms, and Microsoft. The company’s current share price is $140, up more than 35% over the past couple of months. Amazon, Inc has a market capitalization of $1.4 trillion.
Amazon produces books, DVDs, music CDs, videotapes, software), apparel, baby products, and more. Amazon also focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence. Amazon has made Prime, Prime Air, Alexa, Kindle, and Cloud Computing.
Key drivers of Amazon are subscriber growth, its fulfillment strategy, and cloud revenue. It is really a cloud computing company but most investors see it mostly as an online retailer.
Amazon is indeed the largest internet retailer and e-commerce giant, but it derives the bulk of its value from cloud computing services.
A couple of months ago its market value declined to $1 trillion. Insider Monkey valued the value of Amazon's AWS at $1 trillion which meant investors could have bought the rest of the company (i.e. the biggest online retailer in the world for free).
Microsoft Corporation (MSFT), also known as Microsoft, is a multinational technology company with headquarters in Redmond, Washington, in the United States. It manufactures computer software, consumer electronics, personal computers, and related services.
The Windows range of operating systems, the Microsoft Office package, and the Internet Explorer and Edge web browsers are some of its best-known software offerings.
Nevertheless, its stock price went up nearly 1000% over the past decade or so because it transformed itself into a cloud computing company.
Microsoft is focusing on innovating AI and ALT tech innovations. Microsoft makes most of its money from its cloud computing business. Microsoft Cloud's revenue was $25 billion in Q2 and it was up 28% year over year.
Alphabet Inc. (GOOGL) is an American global technological conglomerate holding company. The company is one of the most valuable companies in the world and is the world’s third-largest technology company. The parent of Google has a $1.5 trillion market cap and owns YouTube, Nest, and Waze.
Alphabet’s key revenues are coming from cost-effective online advertising; cloud-based solutions that provide customers with infrastructure and platform services and collaboration tools; sales of other products and services, such as apps and in-app purchases, digital content products, and hardware; and fees received for subscription-based products such as YouTube Premium and YouTube TV.
The company’s main expenses are attributed to sales and marketing, general and administrative functions, and R&D.
Overall, the technology market is one of the most growing industries in the market, and globally, the US IT sector holds a 33% market share. Alphabet Inc is gaining a competitive advantage in the industry by buying other companies, gaining new technologies, and patents, and improving its products and services.
We believe Alphabet Inc is undervalued given its double-digit topline growth rate. The current Alphabet Inc share price is $117. We like Alphabet because of its exposure to artificial intelligence and autonomous driving opportunities.
Moreover, Alphabet Inc makes investments in data centers, and information technology assets and grow its current services and products at a rapid clip. Alphabet Inc reported a 13% revenue growth for the second quarter and has approximately % a 5 free cash flow yield.
While a company holds a lot of promise for the future, there are some risks to be careful about before investing. Most of Alphabet’s revenue is coming from advertising. Companies might cut their advertising budgets sharply during recessions. Moreover, there can be regulation problems.
Antitrust, data privacy, and Section 230, which give online platforms the freedom to control content while shielding them from accountability for posts made by their users, are among the issues that may negatively affect the company in the future.
The American international technological corporation Meta Platforms, Inc. (META) now doing business as Meta (META) and formerly known as Facebook, Inc. is situated in Menlo Park, California. The firm, among other things, is the owner of Facebook, Instagram, and WhatsApp.
Meta Platforms now has a trailing PE ratio of 13 as the stock lost nearly half of its market value recently. Numerous people do not invest in Meta Inc stock because of the risks such as regulatory risk, the decline in advertising rates, and traffic growth risks.
While people are right to be skeptical about Meta Inc, it is a good technology stock to invest in in the long term as a lot of the negative risks are already priced in.
American international financial services company Visa Inc. (V) is headquartered in Foster City, California.
It enables electronic money transfers all across the world, most frequently using Visa-branded prepaid, debit, and credit cards. Visa Inc’s 2022 Q2 average shareholder price is $206.76 and has a market cap of $445 billion.
Visa Inc had net revenues of $28 billion over the last 12 months. One of the main revenue drivers for Visa Inc is consumer payments, new payments, and value-added services. Visa inc is digitizing its consumer payments. Moreover, the pandemic affected consumer choices and actions.
People started to use mobile payments for transactions more. Now people are using technology to make the smallest to biggest transactions.
Based on the 2021 Visa Annual Report, tap to pay now is 70 percent of the in-person transactions, besides the United States.
Visa is keeping investing in resources that support its growth levers, its network of network capabilities, and the larger payments ecosystem.
Visa Inc has a P/E ratio of 31. It is one of those stocks that never trade at a cheap multiple The risk factors of investing in Visa Inc, include regulatory risks, Litigation Risks, and Technology.
Cybersecurity, and Structural & Organizational Risks. Visa can face barriers of reimbursement rates, domestic processing requirements, point-of-sale transaction rules, and more by regulation. Moreover, global payment technology is intensive.
