Tesla heading for a 68 percent plunge?

If you’re looking for all the bearish arguments against Tesla (TSLA), look no further than analyst John Lovallo of Bank of America Merrill Lynch. Earlier this week, he lowered his price target for the electric car maker from $70 to $65 (per Business Insider). That’s 68 percent less than the stock’s trading at right now (around $204)!

Lovallo believes Tesla’s grossly over-valued for one reason: lack of demand. Tsk-tsk, says Tesla CEO Elon Musk. Demand’s not he problem, supply is. Why then, Lovallo wonders, are Tesla’s factories underutilized?

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How Tesla hits $600 per share

Tesla’s biggest cheerleader has to be Global Equities analyst Trip Chowdhry. Chowdhry’s way out in front of the average Tesla price target of $277.50. His price target? $385. That’s more than 75 percent higher than the stock’s current price. Why’s Chowdhry so bullish?

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Tesla stock worth more than Big 3 combined?

If you’re in search of the ultimate Tesla (TSLA) bull, look no further than Trip Chowdhry of Global Equities Research. He has a $385 Tesla price target. That number’s not based on current car sales; it’s based on the notion that the world’s entire transportation ecosystem is on the cusp of a revolution. And Trip Chowdhry believes Tesla’s leading the charge.

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4 things Tesla must do to hit $300 a share

1) Tesla must hit its second production target date on the Model X. Tesla’s developing something of a reputation for missing its production targets. It happened with the Model S, and it already happened once with the Model X.

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Is Apple really going to manufacture an Apple Car?

Speculation’s running rampant that Apple’s angling to get into the automotive industry. There are two theories here:

  1. Apple wants to make its own car.
  2. Apple’s working on software for autonomous or semi-autonomous vehicles.

On the face of it, the idea of software for self-driving or partially self-driving cars seems more likely. But it’s unclear if Apple’s content to stop there. Let’s look at the facts we do have.

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Apple (AAPL) price target of $165 for 2015?

Most investors have a hard time conceptualizing just how large Apple has become. They’re the single largest stock on any U.S. exchange with a market capitalization north of $750 billion. That means they’re 3/4 of the way to a $1 trillion market cap.

To put that in perspective, the entire U.S. economy’s GDP (our country’s entire economic output for a year) is calculated at around $16 trillion!

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Twitter price plunged so dramatically it literally flowed off its chart

When I looked at Twitter’s share price on Google Finance this afternoon, the price had fallen so quickly that it flowed right off Google’s chart.

Twitter Inc.’s (TWTR) shares fell like a stone today after a lockup expired. Suddenly, holders of nearly 500 million shares of TWTR were allowed to sell their stock, and that’s exactly what they did. The price of Twitter shares fell nearly 18 percent today wiping billions off the company’s market cap.

The funny thing was, when I looked at Twitter’s share price on Google Finance this afternoon, the price had fallen so quickly that it flowed right off Google’s chart. Click for a larger version:

twitter-price

Why are search queries trending down?

I was drinking coffee and reading Investor’s Business Daily this morning, when I came across some interesting graphics. The paper reports that “U.S. search queries fell 10 percent in February from January. That’s the biggest one-month decline in the last six months.”

I was drinking coffee and reading Investor’s Business Daily over the weekend, when I came across some interesting graphics. The paper reports that “U.S. search queries fell 10 percent in February from January. That’s the biggest one-month decline in the last six months.”

The number of search queries were down across the board: at Google, Yahoo and Ask.com. Here’s one of their charts showing the overall trend in search queries across all the major search engines:

google-search-trends

The total number of search queries in the U.S. spiked in January, but has otherwise been trending down since October (when there were approx. 19.25 billion searches). February saw 17.75 billion searches.

What IBD didn’t address is why there’s a downtrend in the search queries. Have we reached the search saturation point? My speculation? People are spending more time browsing on smartphones and tablets. There, apps rule, and the web experience is more passive – driven by content discovery rather than proactive web searches. I’d be interested to hear your opinions on why search queries are declining, though! Please use the comments section below.

Amazon (AMZN) stock price targets

Last week, UBS listed Amazon at the top of its list of “oversold tech stocks.” That’s hard to believe when the stock’s already trading at P/E of 578. A closer look at the company’s growth prospects, though, indicates Amazon just might be a very strong buy.

Analysts are very bullish on Amazon’s (AMZN) prospects for growth. A poll of 36 analysts at Yahoo shows that the average earnings estimate for the company stands at $1.92 in 2014. That would be an increase of 225 percent over 2013’s $0.59 per share! What’s even more amazing is the fact that analysts believe Amazon could more than double its earnings again and bring in $4.23 per share in 2015. One analyst actually expects the company to have earnings of $9 a share in 2015!

Overall, analysts expect the company to grow at 49 percent per year over the next 5 years. It’s hard to believe that an online book seller has morphed itself into one of the world’s most formidable online retailers, content providers and internet services companies (thanks to its cloud hosting business).

Analysts are bullish on Amazon’s growth for several reasons:

  • Rapid growth in the company’s cloud-hosting business.
  • A 25 percent price increase for Amazon Prime (from $79 to $99 a year)
  • Strong tablet sales (with Amazon capturing 24 percent of recent tablet orders)
  • Increasing use of Amazon video streaming as the company announced plans to make more content free for all users (a brilliant marketing move that should entice users to buy more premium streaming content) (Amazon has since denied reports by the Wall Street Journal that the company would start offering a free, ad-supported streaming network)

Last week, UBS listed Amazon at the top of its list of “oversold tech stocks” (per 24/7 Wall Street). That’s hard to believe when the stock’s already trading at P/E of 578. Thomson First Call lists a price target of $433.45 for the stock. That would be a 31 percent increase over the current share price of $338. Thomson’s highest price target for the stock (per Yahoo) is $500. The lowest? $330.

3 signs Amazon’s (AMZN) stock is oversold

With the Nasdaq in a near-term downtrend, Amazon’s shares look they’re entering oversold territory. Here’s why…

1) Innovations aren’t priced in. Analysts expect Amazon (AMZN) to announce a “streaming device” at an event in New York City this week (per GainingGreen). Little is known about the device, but I suspect it will compete with Google’s Chromecast and Roku’s new Streaming Stick. That means it will probably be a small HDMI dongle users can plug into their TV’s HDMI ports. From there, users can access free and premium web-based content on their TVs via a remote control or a web page.

2) The experts call it a buy. Last week, UBS put Amazon at the top of its list of the most oversold tech stocks (per 24/7 Wall Street). Others on the list include CA Technologies (CA), Google (GOOG), Infosys (INFY) and Salesforce.com (CRM).

3) Tablet anyone? The Kindle family doesn’t necessarily pop to mind when someone says the word “tablet,” but Amazon’s tablets are actually capturing 24 percent of tablet market share. That’s probably because you just can’t beat Amazon’s prices. A brand new Kindle Fire HDX costs just $199 and has specs that are on par or nearly on par with leading tablets from Apple (AAPL), Microsoft (MSFT) and Samsung.

34% of U.S. consumers said they’re unsure if they’d purchase a tablet in the coming year. Of those, “47% stated high prices to be the reason for their uncertainty,” per TabletPCReview. The average price for a tablet is $326. That makes the Kindle Fire HDX look particularly attractive as its nearly 40 percent cheaper than the average tablet. New and existing Kindle owners are a cash cow for Amazon as they purchase a steady stream of online content from the company in the form of ebooks, movies and TV shows.