What do solar panels, semiconductor chips, and social media companies have in common (other than starting with the letter S and sounding like the setup to a really bad pun)?
They all represent companies that topped Q.ai’s trending list on the first day of June.
While America returned home from the busiest travel weekend since the start of the pandemic – with over 1.9 million air passengers on Friday alone – our AI dutifully rounded up all the stocks that popped off the charts to start out the new month.
Now, as the world heads into the long-awaited post-pandemic summer, let’s see which stocks are charging volume-first into (and out of) America’s brokerage accounts.
Q.ai runs daily factor models to get the most up-to-date reading on stocks and ETFs. Our deep-learning algorithms use Artificial Intelligence (AI) technology to provide an in-depth, intelligence-based look at a company – so you don’t have to do the digging yourself.
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Advanced Micro Devices, Inc (AMD)
Advanced Micro Devices, Inc. closed up over 2% on the Friday headed into Memorial Day weekend, ending the month of May at $80.08 with over 40.95 million trades on the books. Though the stock is down almost 12.7% YTD, its fortunes began to look up on Tuesday when AMD unveiled several exciting advances at Computex 2021.
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Among the new tech offerings are the AMD RadeonTM RX 6000M Series Mobile Graphics, designed to bring desktop-class performance to gaming laptops. The Radeon 6000M Series will work in conjunction with the AMD Radeon Software and AMD RyzenTM 5000 Series Mobile Processors in a brand-new laptop offering, the AMD AdvantageTM Design Framework, which is expected to be released sometime this month.
And if that weren’t enough good (if syllable-heavy) news, AMD also confirmed that their AMD Ryzen processors will be used in the new Tesla infotainment system that Elon Musk promised consumers.
In other words, Tuesday was raining Radeon.
AMD’s recent performance also gives the company reason to celebrate going forward. The semiconductor manufacturer hit 17% revenue growth over the last fiscal year and 76.4% in the last three, leaping from $6.48 to $9.76 billion in a relatively short time frame. Operating income blew that growth out of the water at 36.5% and 314.4%, respectively, growing from $451 million to $1.37 billion.
All told, per-share earnings skyrocketed 644% in the last three fiscal years, from $0.32 to $2.06. Return on equity also jumped from 36% to 57.5% in the same time frame.
AMD is currently trading with a forward P/E of 37.4x, with 12-month revenue expected to grow around 1.7%. While our AI doubts their technicals, it’s much more bullish on the company’s growth potential moving forward, and has rated AMD A in Growth, C in Low Volatility Momentum and Quality Value, and F in Technicals.
Xilinx, Inc (XLNX)
Xilinx, Inc. is a leading chipmaker in the aerospace and defense industries, though it’s also a common name in server products, too. The company is best known for its field-programmable gate arrays, or FPGAs, a class of house-invented microchips that can be customized on the client’s end to optimize performance for specific tasks. This makes Xilinx chips perfect for data server centers, smart cars, and satellites.
Xilinx is trending headed into the new month as investors await the company’s acquisition by AMD, a $35 billion deal confirmed last October that’s expected to close sometime this year. AMD is interested in Xilinx not just for their FPGA potential – and thus its data center foothold – but also for the natural in-route to automotive, aerospace, and defense sectors. Not to mention, Xilinx’s Versal processors are highly likely to be popular with 5G carriers looking to upgrade their infrastructure to run a mix of complex applications in the coming months.
Xilinx traded up 3.2% on Friday, ending the week at $127 even with 1.65 million trades on the books. Though the stock is down over 10% for the year, it’s up compared to the 10-day price average of $122.51.
In the tough pandemic climate, Xilinx faltered compared to some leading semiconductor manufacturers. Revenue expanded 2.9% over the last three fiscal years, from $3.06 billion to $3.15 billion. Operating income declined from $956.8 million to $753 million in the same period. Per-share earnings dropped, as well, from $3.47 to $2.62 in the last fiscal year, while return on equity plunged from 34% to 24.9%.
Still, Xilinx is trading at forward earnings of 35.8x – perhaps goaded on by the impending prospect of acquisition. Our AI rates Xilinx B in Growth, C in Low Volatility Momentum and Quality Value, and F in Technicals.
Apple, Inc (AAPL)
Apple, Inc. ticked down 0.5% on Friday to $124.61 per share, continuing a downward trend compared to the 22-day price average of $127 and change. The company hit 71.3 million trades in total on the last trading day of May and slunk down 6.09% for the year.
Apple is one of those stocks that many analysts remain consistently bullish on due to strong product demand and their government-style command of cloud space and rule-setting for others in the tech space. In fact, some analysts predict that Apple’s sideways prices are merely the company gearing up to soar to new heights in the coming quarters.
Still, Apple slipped throughout much of May, with Friday’s downtrend partly thanks to New Street Research downgrading the stock to “sell” after predicting a 30% decline in stock prices. Sales of the flagship iPhone, analyst Pierre Ferragu argued in a note to clients, are likely to decline from their $48 billion peak in Q2 alone.
Apple posted strong gains throughout the pandemic, as well. Revenue grew 18.5% in the last fiscal year, compared to 22.5% over the last three, from $265.6 billion to over $274.5 billion. Operating income commanded a decent chunk of that revenue, with 34% growth in the last fiscal year bringing operating income to $66.3 billion – though this is down from the $70.9 billion income seen three years ago.
In the same period, per-share earnings jumped 49.3%, from $2.98 to $3.98, while ROE leaped from 49.4% to almost 73.7%. All told, Apple is trading with a forward 12-month P/E of 24.24x, with revenue expected to expand around 1%.
And despite Apple’s banner year, our AI surmises there are profits yet to be plucked for investors, and has rated the tech behemoth B’s in Growth, Low Volatility Momentum, and Quality Value, and D in Technicals.
Enphase Energy, Inc (ENPH)
Enphase Energy, Inc. nudged up 0.5% on Friday, trading 2.175 million shares toward a final price of $143.05. While Enphase is currently down 18.5% YTD, Friday’s share price saw the company rise above the 22-day, $130.60 price average.
Enphase Energy rose to prominence, somewhat inexplicably, during the 2020 pandemic. The company is the go-to manufacturer for solar microinverters – the components that convert a solar panel’s direct current into the alternating current used by the power grid.
While Enphase stock tumbled significantly in the start of 2021, and again in April following a massive sell-off when the company noted it would feel shockwaves from the semiconductor shortage, its stock is now rising again. (Though this could be, in part, thanks to a new $500 million share repurchase program.) And thanks to the Biden administration’s aggressive decarbonization goals, it’s probable that Enphase – or at least companies like it – will benefit in the years to come.
In the last fiscal year, Enphase saw its revenue expand over 12.4%, and 175.4% in the last three, bringing total revenue to an all-time high of $774.4 million compared to $316.2 million three years ago. Similarly, operating income grew 10.6% over the last fiscal twelve months – though it positively exploded over the last 36, with 3,060% growth seeing operating income leap from $6.5 million to $186.4 million.
Likewise, per-share earnings ballooned from $0.12 to $0.95, while return on equity hit 35.4% for the first time. Enphase Energy is projected to see 5% growth over the next twelve months and is trading with a high P/E of 68.7x.
However, our AI is wary of Enphase’s sudden, explosive growth and what it means for investors. Enphase is rated low across the board, with C’s in Growth and Quality Value, D in Technicals, and F in Low Volatility Momentum.
Facebook, Inc (FB)
Facebook, Inc. is trending this week because, well, when is Facebook not trending? After announcing the impending developing of several new products in recent weeks, the company has now snagged a top Google Maps executive for its entertainment product space. Plus, the company just signed a deal with Nine Entertainment, multi-year content supply agreement that puts Facebook back in the good graces of Australia’s news media bargaining code.
Still, Facebook closed down 1.2% on Friday, ending the week at $328.73 with 12 million trades on the books. The stock is up 20.3% for the year, and significantly over the 22-day price average of $318.24.
In the last three fiscal years, Facebook’s revenue has grown 69% from $55.8 billion to $85.965 billion. Operating income commanded 53% growth in the same period, bringing Facebook up to $32.67 billion from $24.9 billion, while per-share earnings similarly grew 54% from $7.57 to $10.09.
Currently, Facebook is trading with forward 12-month earnings of 24.9x, while revenue is expected to grow 4% over the next year. Our AI rates Facebook B in Growth, Low Volatility Momentum, and Quality Value, and D in Technicals.
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