HSBC analyst Frank Lee downgraded Intel (Nasdaq: INTC) stock reduce with a $24 price target this morning.
“Intel has recently announced three deals,” says Lee, “driving a substantial re-rating of the stock: 1) SoftBank investing USD2bn; 2) the US administration investing USD11.1bn for a 9.9% equity stake; and 3) NVIDIA … investing USD5bn for a c4% stake. While the deals were at a discount to the market price, the stock is up 55% since the first deal announcement in August.”
So basically, Lee thinks the stock has gone up more than it should for the news it received. Investors beg to differ, however, and Intel stock is still rising, up 0.8% today.
The Voo is now up 0.5%.
Continuing the copper theme, Morgan Stanley analyst Carlos De Alba upgraded Southern Copper (NYSE: SCCO) stock to equalweight with a $132 price target today.
“Recent supply disruptions from main listed copper players, coupled with Grupo Mexico’s governance issues, are limiting avenues for investors to play the copper theme,” explains De Alba, “and we no longer expect SCCO to underperform in this context given its smooth execution and seamless operations.” To the contrary, the analysts expects SCCO “to trade at an elevated multiple vs. its historical average.”
Investors seem to agree. Southern Copper stock is up nearly 5% this morning, and the Voo is still up 0.2%.
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The Vanguard S&P 500 ETF (NYSEMKT: VOO) closed 0.4% lower on Tuesday, snapping a six-day winning streak, as the U.S. government endured its seventh straight day of shutdown.
Today is Day 8, and the economy is starting to show signs of stress at various pain points. Airports in Boston, Chicago, Houston, Las Vegas, Nashville, and Philadelphia — to name a few — have all reported flight delays caused by strain on the air traffic controllers who have been working without pay now for more than a week.
Adding to investor worry is a report from The Information suggesting that the artificial intelligence economy may not be all it’s cracked up to be. Focusing on software giant Oracle (NYSE: ORCL | ORCL Price Prediction), which has been taking a prominent position in AI, The Information reports that cloud profit margins look weaker than forecast and the company may be losing money on “some” deals wherein it rents out computing power to AI providers.
Oracle shares shed 2.5% yesterday, although they’re getting back about 0.2% premarket today. The Vanguard S&P 500 ETF is also inching higher again, up about 0.2%.
Not all the AI news is bad. Seaport Global Securities analyst Angie Storozynski upgraded shares of S&P 500 component company Constellation Energy (Nasdaq: CEG), a large electric utility, operator of the Three Mile Island nuclear power plant, and supplier of power to large AI providers such as Microsoft (Nasdaq: MSFT).
“The multiples are still rich vs. those of VST, CEG’s closest peer, but for a good reason given CEG’s size and its nuclear/gas earnings mix,” says Storozynski. Still, “we would want to be long CEG into its refreshed earnings update.” She upgrades Constellation stock to buy with a $407 price target.
Elsewhere in the market, Citi upgrades copper miner Freeport-McMoRan (NYSE: FCX) to buy with a $48 price target. And Deutsche Bank upgrades Northrop Grumman (NYSE: NOC) to buy with a $700 target.
Like Constellation, Freeport and Northrop are both S&P 500 component stocks.
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Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors.
He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.
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