Three Gold Stocks for April 2023

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Gold has long been considered a reliable hedge against inflation and a safe haven for investors during uncertain times. With the recent economic turmoil and global uncertainty, many investors are turning to gold as a means of protecting their wealth. As a result, gold stocks are becoming increasingly attractive to investors looking to capitalize on the precious metal. Today, the price of gold is hovering around the $2,000 per ounce mark,  nearing its all-time high of $2,074.88, seen in August 2020.

This recent move in precious metals may have more to run. Thus, investors appear to want exposure to gold in its various forms. We have identified three stocks that are currently attractive and well-positioned to benefit from the current market environment. These companies have shown strong growth potential and are poised to capitalize on the increasing demand for gold.

Newmont Corporation (NEM)

As a leading gold producer with operations in multiple countries worldwide, Newmont has a strong portfolio of assets and a proven track record of success. NEM is up 16% over the past month and will likely sustain solid momentum if the commodities price continues to rise. Gold miners often see increases far in excess of gold. That means that in bull market runs like this for precious metals; investors gain more upside. 

Newmont has an investment-grade balance sheet and ended 2022 with a total liquidity buffer of $6.7 billion. Last year, the company delivered free cash flow of $1.1 billion. The stock trades at an attractive forward price-earnings ratio of 22.8 and offers a dividend yield of 3.3% with apparent headroom for healthy dividend growth in 2023. With a focus on operational excellence and sustainability, Newmont is well-positioned to continue generating solid returns for its investors.

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Sandstorm Gold Ltd (SAND)

SAND is a gold royalty company that provides upfront financing to gold mining companies in exchange for a percentage of the future production of gold. The company’s unique business model provides investors with exposure to gold prices without the risks and costs associated with traditional mining operations.

Recent financial results have been impressive, with strong revenue growth and improved margins. Additionally, the company’s balance sheet is solid, with a healthy cash position and no long-term debt. Technically, SAND is showing bullish signals on the charts, with a 19% gain over the past month. The Relative Strength Index (RSI) is also in bullish territory, indicating that the stock has momentum on its side.

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Barrick Gold Corporation (GOLD)

As one of the largest gold mining companies in the world, Barrick has a diverse portfolio of mines located in some of the world’s top gold-producing regions, which helps to mitigate risks associated with any particular location. With a robust portfolio of assets and a track record of successful acquisitions. The company has a strong balance sheet and is focused on delivering value to its shareholders through operational excellence and strategic growth initiatives.

Barrick Gold Corp is up 21% over the past month and may have room to run. Analysts give the stock a Buy rating, and an average price target is $21.74, which represents a 16% upside. Considering the current market environment and the positive signals surrounding GOLD, it seems like a conservative estimate.  

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Why We Love Gold As An Investment

Gold has been valued by humans for centuries for its aesthetic and intrinsic value. In recent times, gold has become a popular investment choice due to its perceived ability to hedge against inflation and economic uncertainty. In this report, we will discuss the reasons why gold is a good investment.

  1. Hedge against inflation: Inflation is a natural part of any economy, and over time, the value of money decreases due to inflation. In contrast, the value of gold remains relatively stable over time, making it an effective hedge against inflation. When inflation rates increase, the price of gold typically rises as investors seek to preserve their wealth.
  2. Safe haven investment: Gold is often considered a safe haven investment, meaning that it tends to hold its value during times of economic and geopolitical uncertainty. During times of crisis, investors tend to move their money out of riskier assets and into safer assets like gold. This has been seen during times of war, economic crises, and political instability.
  3. Diversification: Gold can be a valuable addition to a diversified investment portfolio. Diversification is important because it helps to spread risk and can provide a cushion against market volatility. When the stock market is down, gold prices tend to rise, making it a good option to have in your portfolio.
  4. Limited supply: Gold is a finite resource, and the supply is limited. Unlike paper currency, which can be printed endlessly, the amount of gold in the world is finite. As a result, the price of gold tends to rise over time as the supply becomes scarcer.
  5. Liquidity: Gold is a highly liquid asset, meaning that it can be easily bought and sold. This makes it an attractive investment option for those who want to be able to convert their investment into cash quickly and easily.

In conclusion, gold can be a good investment option for those looking to hedge against inflation, diversify their portfolio, and provide a safe haven during times of economic and geopolitical uncertainty. While it is not without its risks, gold’s limited supply and ability to hold its value over time make it a popular choice for investors.

To your wealth,

Skip Swanson


Three Stocks for the Week of April 3rd

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Markets wrapped up a volatile month and quarter with a significant divergence among the major indexes. Strength in technology stocks offset weakness in the financial sector, resulting in a 17% quarterly gain and a 4.5% gain in April for the tech-heavy Nasdaq. Meanwhile, the S&P 500 added 7.5% for the quarter and 1.6% for the month, and the Dow was up 0.9% in Q1 but lost a fraction of a percent in April.  

Even after a hot start to 2023, some growth stocks are still way too cheap. This week’s first recommendation is a notable tech name with stellar cash flow and growth potential currently presenting an attractive risk-reward proposition.    

Meta Platforms Inc. (META)

One notable growth name that got hammered in 2022 is Meta Platforms Inc. The stock currently trades at less than 25x forward earnings. Still, with the most prominent family of apps and 4 billion users worldwide, META’s recovery this year has been swift. The ticker has stacked on 64% YTD. 

Despite its recent rally, the social media leader’s stock is still down 46% from its high and looks cheaply valued for long-term investors. Meta’s incredible cash flow and balance sheet also afford it the ability to take chances and invest in things like the metaverse. The company closed out 2022 with $30.8 billion in net cash, cash equivalents, and marketable securities. Further, it generated $42.7 billion in operating income from its family of apps. 

Meta trades at under 20 times the expected annual profit and four times expected sales. With a core business that has held up well against intense pressures, underappreciated potential for success in the metaverse, and shares trading at multiples that leave room for significant upside, Meta stock continues to look undervalued.

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StoneCo Ltd. (STNE)

Brazilian digital payments company StoneCo Ltd. (STNE) provides back-office software, loans, and other financial services to small and medium-sized businesses. Last month, a Brazilian central bank survey showed economists expect rate cuts to start in November. Last week, the country’s central bank kept its benchmark rate at 13.75% despite pressure from President Luiz Inácio Lula da Silva’s government to ease borrowing costs. STNE could yield some big gains for investors as interest rates come down in Brazil.

StoneCo’s share price has gotten crushed in the last two years. In 2021, it fell a whopping 79.9%. In 2022, it dropped 44% as growth and tech names languished. The stock is up nearly 12% in 2023 and seems likely to continue its upward trajectory as economic policy eases in Brazil. Despite the recent rally, shares are still cheap at just 14.9 times the amount of free cash flow its operations generated over the past year. STNE has a Hold rating from the pros who cover it and a median target price of $12.33, representing a 32% increase from Wednesday’s closing price.  

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Axsome Therapeutics (AXSM)

Axsome Therapeutics has two approved drugs on the market. Sunosi, a dopamine-norepinephrine reuptake inhibitor and the only one of its kind to treat narcolepsy, and Auvelity, a fast-acting oral treatment for depression, also the first of its kind. The latter launched in October and is being evaluated to treat agitation in people with Alzheimer’s disease and to help people quit smoking.    for the treatment of central nervous system disorders and two others that it plans to submit for FDA approval this year.

Share price sank more than 10% last month following the release of disappointing fourth-quarter earnings. The company incurred an adjusted loss of $1.28 per share and generated $24.4 million in revenues. Spending was up 227% year over year. But this increase was due to higher commercial activities for Sunosi and Auvelity, including sales force onboarding and marketing spending, which should pay off in the coming quarters.

Other potential tailwinds include Axsome’s two other drugs — AXS-07 for treating migraines and AXS-14 for fibromyalgia — that it plans to submit for FDA approval this year.

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Three Stocks to Avoid or Sell Next Week

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Seeking out great stocks to buy is important, but identifying quality investments is only half the battle. Many would say it’s just as essential for investors to know which stocks to steer clear of. A losing stock can eat away at your precious long-term returns. So, figuring out which stocks to trim or get rid of is essential for proper portfolio maintenance.  

Even the best gardens need pruning, and our team has spotted a few stocks that seem like prime candidates for selling or avoiding. Continue reading to find out which three stocks our team is staying away from this week.

Bed Bath & Beyond (BBBY)

The home goods retailer is staving off bankruptcy by raising capital from selling its preferred stock and warrants. But, unfortunately, this action may prolong its inevitable bankruptcy. 

In early 2021 BBBY’s share price rose to more than $35.  Two years later, it’s below $1 per share and is one of the most heavily shorted stocks in the market. The company is struggling to keep up against retail heavy-hitters like Walmart and Target, and it will only worsen with Bed Bath continuing to close retail locations.

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Ascent Solar Technologies (ASTI) 

The photovoltaic specialist carries significant implications for the solar energy industry. With society gravitating toward clean and renewable energy solutions, ASTI should be enjoying extraordinary relevance. Unfortunately, its narrative hasn’t been so fortunate. Year to date, ASTI share price is down 72%. In the trailing year, it’s down almost 96%.   Glaringly, its three-year revenue growth rate sits at 90.3% below parity. Profit margins have slipped to ridiculously negative rates while the balance sheet is a mess. Gurufocus.com warns that Ascent solar is a possible value trap.  

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Big Lots (BIG)

Shares in the big box retailer may be down by nearly 71% over the past 12 months. Some investors are still being tempted by its 10.82% dividend yield. However, with the company reporting a net loss of $7.30 per share and expected to stay in the red through 2024, it’s highly questionable whether BIG’s high rate of payout will continue for long.

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Three Ways to Benefit from Weakness in the Financial Sector

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While the collapse of Signature Bank and Silicon Valley Bank sent shockwaves through the financial markets, it may be fueling a rebound elsewhere. 

After panic ripped through markets, analysts are sounding the alarm on some stocks that have well overshot their downside. Moreover, some analysts have suggested that the added pressure on the financial sector could soften the course of future Fed rate hikes, which would likely help certain risk assets.

Whether you’re looking for a short-term win or to strike up a long-term position at a great price, you’ll want to keep an eye on these assets in the coming days.   

BTC

Bitcoin bulls have claimed the digital currency is a way for investors to shield themselves against government moves, such as quantitative easing and looser monetary policy, which they say erodes the value of fiat currency. Industry insiders are saying that the anticipation of a slower pace of interest rate hikes from the Federal Reserve is helping bitcoin. Proponents also point to bitcoin’s finite supply as a critical feature of it being a store of value.

“The events around the failure of SVB and other banks have also shone a spotlight on the power of decentralized currencies that people can fully custody and own,” said Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno.  “Decentralized finance is beginning to hit home in terms of a concept to many more people now.”

Bitcoin is up more than 70% this year, beating major stock indexes and commodities.

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Charles Schwab Corp. Common Stock (SCHW)

Charles Schwab shares plunged 34% over the past month along with regional banks as traders worried that they would have to sell their bond holdings early at significant losses to cover deposit withdrawals, like Silicon Valley Bank. However, CEO Walt Bettinger said in an interview with CNBC that Schwab is still experiencing “significant” asset inflows.

Credit Suisse analyst Bill Katz recently upgraded the brokerage firm to outperform from neutral, saying it’s time for investors to “take advantage of the sharp share price decline.” 

“We expect the net new asset (NNA) story to remain robust and capital ratios to quickly rebuild as we look into 2024-25, with the current value giving investors an opportunity to step into a high-quality, large-cap secular beneficiary,” Katz wrote.

The analyst’s $67.50 target price, down from $81.50 previously, means shares can rise another 24% from Friday’s closing price. The stock is down nearly 37% this year.

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Ark Innovation ETF (ARKK)

While most of Wall Street has been in panic mode amidst the banking crisis, Cathie Wood’s flagship Ark Innovation ETF (ARKK) reeled in $397 million in new money on Tuesday, March 14th, following the bank collapses, the biggest one-day inflow since April 2021, according to FactSet. Investors are piling into the innovation fund under the belief that the current banking chaos may cause the Federal Reserve to pull back on its rate hike campaign, which would benefit growth stocks. 

“Once the Fed stops looking backwards at CPI inflation and starts addressing the deflationary banking crisis that a 19-fold increase in short rates and an inverted yield have caused, we would not be surprised to see a return to the Roaring Twenties,” Wood said in a tweet.

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Three Wildly Undervalued Growth Stocks

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These stocks with enormous growth potential are too profoundly discounted to ignore.  

The growth stock collapse of 2022 has shifted to a growth stock resurgence in 2023. Cathie Wood’s growth-centric ARK Innovation ETF (ARKK) sank nearly 70% last year. This year it’s up more than 20% and may just be the beginning amid a shifting economic backdrop.

The Federal Reserve has become increasingly dovish in 2023, downshifting all the way back to a 25-basis-point rate hike at its most recent meeting. Recent talk of a pause and potential rate cuts in the future has made way for investors with an appetite for growth stocks with high reward potential.

Even after a hot start to 2023, some growth stocks look way too cheap. We’ve got three recommendations of stocks with stellar growth potential presenting attractive risk-reward propositions at their current prices.    

Meta Platforms Inc. (META)

One notable growth name that got hammered in 2022 is Meta Platforms Inc. The stock currently trades at less than 25x forward earnings. Still, with the most prominent family of apps and 4 billion users worldwide, META’s recovery this year has been swift. The ticker has stacked on 64% YTD. 

Despite its recent rally, the social media leader’s stock is still down 46% from its high and looks cheaply valued for long-term investors. Meta trades at under 20 times the expected annual profit and four times expected sales. With a core business that has held up well against intense pressures, underappreciated potential for success in the metaverse and shares trading at multiples that leave room for big upside, Meta stock continues to look significantly undervalued.

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Lithium Americas Corp (LAC) 

By 2029, electric vehicles could account for a third of the North American market and about 26% of vehicles produced worldwide, according to AutoForecast Solutions. Lithium Americas Corp is one company hoping to ride the wave of anticipated global EV demand. The company has full ownership of two development-stage mining operations in Argentina. One of which is approaching initial production, expected to come later this year. 

The high-growth -potential small-cap has been gaining the attention of the pros on Wall Street. “We believe 2023 could be an eventful year as there could be a number of key announcements on growth projects and Argentina divesture, which could be catalysts for the share price,” explained HSBC analyst Santhosh Seshadri. To this end, Seshadri recently initiated coverage of LAC with a Buy rating, backed by a $36 price target.

Most analysts agree with Seshadri’s thesis. LAC claims a Strong Buy consensus rating, based on 13 Buys vs. 1 Hold and no Sell ratings. At $37, the average price target makes room for 12-month gains of 74%.

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AssetMark Financial Holdings (AMK)

Leading asset manager AssetMark Financial continues to grow as it looks to become a full-service wealth management platform. Its recent acquisition of Adhesion Wealth, which provides wealth management technology solutions to investment advisors and asset managers, will expand its offerings. The company has been growing rapidly and has forecast annual EPS growth of 32% during the next five years. It has also seen its valuation come down to a P/E of 22, which is an excellent value for this growth stock.

The stock is up 34% already this year. Even if the market does retreat, AssetMark still expects roughly 10% growth in assets on its platform in 2023 and 20% year-over-year revenue growth. And as we emerge from this volatile market toward the next bull market, the company, a leader in the market, should see continued growth since asset managers thrive in bull markets.

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Three Stocks to Watch for the Week of March 27th

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Stocks oscillated between gains and losses last week but closed modestly higher amid concerns over the banking system, Fed outlook, and recession risks. The S&P 500 added 1.37%, the Dow rose 1.15%, and the Nasdaq finished the week 1.81% higher.  

This week, we’ll receive the latest updates on home prices, with the Case-Shiller National Home Price Index for January. Investors will also find out if inflation extended its uptick into February with the release of the Federal Reserve’s preferred gauge for checking prices. The most recent report showed that the Personal Consumption Expenditures Price Index rose 0.6% in January, marking the most significant month-to-month increase since last June.     

Growth stocks got hammered in 2022, but investors want a fresh start in 2023. If you believe in the buy-low, sell-high philosophy, you may want to read ahead. Our first recommendation was one of the biggest losers in 2022 as the inflation rate skyrocketed against historical norms. According to some of the pros, this stock is undervalued and poised for resurgence.

Match Group (MTCH)

The pandemic provided a bump in online dating and sent MTCH stock price soaring, reaching its ATH of around $169 in October 2021. Since the share price has lost nearly 75% of its value, but the global, fundamental need to meet people isn’t going anywhere. Match benefits from inelastic demand, compared to other consumer discretionary names. Which the company intends to continue capturing with its technologies, including Tinder, OkCupid, and Hinge, providing a solid and resilient subscription-based business. MTCH has a consensus Buy rating. A $60 price target implies a 50% upside.   

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Uber Technologies (UBER)

The global ride-sharing market is expected to grow from $84.30 billion in 2022 to a whopping $242.73 billion in 2028, representing a Compound Annual Growth Rate (CAGR) of 16.3% over the next six years. Uber stands out as a clear winner in the ride-sharing race based on profit growth and current valuation.

 Uber’s gross bookings rose 28% in 2022, down from its 56% post-pandemic growth in 2021, and it expects just 17%-21% year-over-year bookings growth in the first quarter of 2023. However, its adjusted EBITDA improved from a loss of $774 million in 2021 to a profit of $1.7 billion in 2022. It also expects to post a positive adjusted EBITDA of $660 million to $700 million in the first quarter. The impressive profit growth can be attributed to its cost-cutting measures and rising take rates across its mobility and delivery businesses.

For the full year, analysts expect Uber’s revenue to increase 16% to $36.9 billion as its adjusted EBITDA rises 86% to $3.2 billion. Based on those estimates, its stock trades at just two times this year’s sales and 21 times its adjusted EBITDA. It’s also still trading nearly 25% below its IPO price. 41 0f the 46 analysts offering recommendations say to Buy Uber stock. A median price target of $47 represents an increase of 50% from the current price.  

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UPS (UPS)

UPS stands to benefit from the current global supply chain disruptions, as the company’s expertise in logistics and supply chain management makes it well-positioned to navigate these challenges. As consumers increasingly turn to online shopping and same-day delivery options, UPS is poised to capitalize on these trends and continue its strong growth trajectory. With a 3.51% yield to sweeten the deal, it’s attractive to investors looking for stocks to hold long-term.

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Three Stocks to Avoid or Sell Next Week

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Seeking out great stocks to buy is important, but identifying quality investments is only half the battle. Many would say it’s just as essential for investors to know which stocks to steer clear of. A losing stock can eat away at your precious long-term returns. So, figuring out which stocks to trim or get rid of is essential for proper portfolio maintenance.  

Even the best gardens need pruning, and our team has spotted a few stocks that seem like prime candidates for selling or avoiding. Continue reading to find out which three stocks our team is staying away from this week.

Palantir (PLTR)

Some data points from Palantir’s fourth-quarter results indicate that, despite businesses and governments’ increased embrace of AI in recent months, the company’s growth is slowing a great deal. In Q4, the company’s U.S. revenue increased just 1.7% versus the previous quarter to $302 million. And its overall top-line growth slowed to 18% year-over-year in Q4, down from 22% in Q3.  

On a positive note (snicker), after nearly 20 years of existence, the company generated its first quarterly profit, as it reported a Q4 net income of $31 million or 1 cent per share. However, its operations still generated an $18 million loss, with its operating margin at a discouraging -4%.

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Big Lots (BIG)

Shares in the big box retailer may be down by nearly 71% over the past 12 months. Its 10.82% dividend yield is still tempting some investors. However, with the company reporting a net loss of $7.30 per share and expected to stay in the red through 2024, it’s highly questionable whether BIG’s high rate of payout will continue for long.

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Black Hills Corporation (BKH)

Natural gas producer Black Hills Corporation reset its growth outlook lower after reporting disappointing Q4 results, slashing its 2023 EPS view to $3.65-$3.85 from $4.00-$4.20. The revision was driven by a rapid shift in macroeconomic factors, including elevated natural gas price volatility and higher natural gas demand driven by winter storm Elliot in December 2022. With elevated natural gas price volatility, higher interest rates, and general inflationary pressures forecasted through 2024, Black Hills is only expected to grow earnings by 2% in 2024 and 4% in 2025.

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Uber vs. Lyft?  

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Analysts say one of the stocks is set to soar 50%.

Amid inflation, rising rates, and a fractured financial sector, it might seem safer to park your cash in a safe haven until the market stabilizes. However, opportunistic investors see this as an ideal time for actively seeking out undervalued stocks that could rally as the macro environment improves. One beaten-down area of the market that is poised for rapid recovery as global economies rebuild strength is ride-sharing.   

The global ride-sharing market is expected to grow from $84.30 billion in 2022 to a whopping $242.73 billion in 2028. That figure represents a Compound Annual Growth Rate (CAGR) of 16.3% over the next six years, mainly split between two competitors. In the world of ride-sharing companies, Uber and Lyft form a de facto duopoly. It’s estimated that the two names together command more than 95% of the rapidly expanding market.

Over the last couple of years, both companies have made a number of strategic investments that are beginning to materialize. However, one of these two names stands out as a clear winner based on profit growth and current valuation. Institutional investors have recently taken notice, and many of the Wall Street pros have expressed bullish sentiment on one of these two stocks. In fact, analysts see one of the two ride-hailing competitors’ share price stacking on more than 50% over the next 12 months.  

Uber Technologies (UBER) 

Uber’s gross bookings rose 28% in 2022, down from its 56% post-pandemic growth in 2021, and it expects just 17%-21% year-over-year bookings growth in the first quarter of 2023. However, its adjusted EBITDA improved from a loss of $774 million in 2021 to a profit of $1.7 billion in 2022. It also expects to post a positive adjusted EBITDA of $660 million to $700 million in the first quarter. The impressive profit growth can be attributed to its cost-cutting measures and rising take rates across its mobility and delivery businesses.

Analysts expect Uber’s revenue to increase 16% to $36.9 billion for the full year as its adjusted EBITDA rises 86% to $3.2 billion. Based on those estimates, its stock trades at just two times this year’s sales and 21 times its adjusted EBITDA. It’s also still trading nearly 25% below its IPO price. 41 0f the 46 analysts offering recommendations say to Buy Uber stock. A median price target of $47 represents an increase of 50% from the current price.  

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Lyft (LYFT) 

After cratering last year, Lyft’s share price plunged again recently following the release of its latest disappointing financial results and lowered guidance. Shares have continued to slide since the release, and the stock today changes hands at single-digit prices. Yet while at first glance, LYFT may seem like a bargain, it could easily end up being a cheap stock that keeps getting cheaper. Although the company has worked to lower costs, it is difficult to see how it can be competitive on price and also ramp up its margins towards levels indicated in its guidance objectives without further and substantial cost cuts.  

Analysts have slashed their 2023 earnings forecasts as concerns rise that the company’s efforts to regain ground lost to Uber will result in lower profits, with little to show for it. The consensus among 43 polled analysts is to hold Lyft stock. An average price target of $12.25 represents an increase of 23%. 

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Three AI Stocks to Buy for Explosive Growth

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Investors have been pouring into rapidly developing AI tech names over the past few months, and this is likely just the beginning. According to Grand View Research, the global artificial intelligence market reached a valuation of $136.55 billion in 2022. It’s projected that by 2030 the industry will command a revenue of nearly $1.9 trillion.  

Anyone looking to profit from the paradigm shift may wonder which companies stand to gain the most as breakthrough advancements are made in the industry. Here we’ll look at three Buy-rated standouts from the burgeoning AI group with plenty of runway ahead, including one ticker the Wall Street pros see stacking on more than 100% over the next 12 months.  

With cyber threats materializing all the time, cybersecurity technology specialists, CrowdStrike (CRWD), is one of the most relevant AI stocks to buy. After losing nearly half of its value in 2022, CRWD is up 32% this year. Of 37 analysts offering a recommendation for the stock, 33 have an optimistic view, yielding a consensus Strong Buy assessment. In addition, their average price target stands at $165, implying an upside potential of over 22%. Therefore, CRWD is one of the top AI stocks to buy.

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Luminar (LAZR) is at the forefront of lidar technology development with products designed to integrate sensors with AI, giving cars autonomous safety features to support a human driver. After losing more than 70% of its value in 2022, LAZR is up nearly 50% this year. The stock garners a solid Buy rating from the 12 analysts offering recommendations. An average price target of $12 represents a 55% upside from the current price. 

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Small-cap Berkshire Grey (BGRY) leans to the speculative side of the scale, but according to certain Wall Street pros, BGRY has the potential to reward investors with a more than 110% projected upside. The American tech company develops integrated artificial intelligence and robotic solutions for e-commerce, retail replenishment, and logistics and has been gaining investor attention. The share price is up a whopping 77% YTD and may have plenty of room to run if the two analysts’ recommendations are correct.    

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