Markets are gearing up for a 2024 stock surge. This is unreasonable. After the S&P 500 (SPY) gained 23.41%, valuations are stretched, especially in technology. Investors need to look for discounts in this sector when picking stocks.
China tech stocks are generally high risk. NIO, a China-based electric car maker, may have less risk after getting $2.2 billion.
CYVN Holdings, an investment vehicle based in Abu Dhabi, will invest $2.2 billion in Nio. In return, it will get 294 million Class A NIO stock at $7.50. The deal dilutes current investors. However, the cash injection will fund Nio’s operating needs.
ARM Holdings (ARM), which fell 3.04% yesterday, cut 70 of its software engineers in China. Although the firm faces lower chip sales this year, the resource reallocation is a positive development.
Raymond James downgraded cybersecurity firm Palo Alto Networks (PANW). The stock is at an all-time high on lofty P/E multiples. Wait for a pullback first.
JMP downgraded Shopify (SHOP), citing income worries. It expects an EPS of $1.03, below consensus. Shopify’s platform is at the heart of small businesses. This area will thrive in 2024 as financial conditions loosen. Expect Shopify to post a great Q4 report. A strong economy translates to strong results for Shopify in 2024.
