1/9/2024 0 Comments Jim fink stocks![]() and Canada and 25% from Europe.įacebook’s sticky ecosystem comprises the Facebook app, Instagram, Messenger, WhatsApp, and many features surrounding these products, which helps the company amass valuable user data. Advertising revenue represents more than 90% of the firm’s total revenue, with 50% coming from the U.S. World’s largest social network with 2.5 billion monthly active users, Facebook (FB) provides a platform for users to exchange messages and share news events, photos, and videos. “We expect digital ad revenue growth will remain at strong double-digit rates for both firms for several years,” says Morningstar equity analyst, Ali Mogharabi, who pegs the stock’s fair value at US$2,925.Īlphabet boasts sustainable competitive advantages built on the company’s significant intangible assets including technological expertise in search algorithms and machine learning, as well as access to and accumulation of data that is deemed valuable to advertisers. These fears are disputable and while rising rates should pressure multiples, Alphabet has “already been trading at what we view as unwarranted discount compared with peers,” says a Morningstar equity report.Īs for the ad revenue declaration in the second half of 2021, the report assures it would be a short-term effect resulting from the pandemic. Wide-moat Alphabet recently saw a 2% decline triggered by fears of rising rates and a slowdown in digital ad spending growth. The company’s other revenue streams include sales of apps (Google Play), video streaming business (YouTube) and hardware (Chromebooks and the Pixel smartphone). Silicon Valley giant Alphabet (GOOG) is best known for its search engine Google, which generates 99% of its revenue. Microsoft is also moving some of its traditional on-premises products to cloud, including such critical applications as LinkedIn, Office 365, and Dynamics 365. “Azure is an excellent launching point for secular trends in AI, business intelligence and Internet of Things, as it continues to launch new services centred around these broad themes,” asserts Morningstar equity analyst, Preston Caldwell, who puts the stock’s fair value at US$278. ![]() The tech heavyweight’s cloud service platform Azure has grown to become the crown jewel of the company. “These factors have combined to drive a more focused company that offers impressive revenue growth with high and expanding margins,” says a Morningstar equity report. Additionally, the company has accelerated the transition from a traditional perpetual license model to a subscription model, while divesting from low-growth low-margin business. Under CEO Satya Nadella, Microsoft has reinvented itself into a cloud leader. The firm’s business comprises three segments: productivity and business processes, intelligence cloud, and personal computing. Best known for its Windows operating system and Office productivity suite, the company develops and licenses consumer and enterprise software. Tech major Microsoft (MSFT) is the second most valuable company by market cap, behind Apple. The sizeable margin of safety and strong fundamentals make these names compelling prospects for economic reopening and advertising growth play. These tech heavyweights in Morningstar’s coverage universe are trading at double-digit discounts to their fair values, indicating potential for upside. However, the tech sector has handily topped the broader index over the one-, three- and five-year periods. Technology index (just under 6%, expressed in U.S. dollars) is currently underperforming the S&P 500 (over 11%) for the year to date, as of May 27, 2021. Luckily, the relative underperformance so far this year of the tech sector compared to the benchmark may make things easier. However, given the level of economic uncertainty and jitters over higher inflation and rising interest rates, investors can't be too careful should be careful in their stock selection. The recent drop in technology stocks has created some rare buying opportunities for investors looking to add or expand exposure to the technology sector.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |