Here’s what’s hot and what’s not today…
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🔥 HOT: Roku (NASDAQ: ROKU) lost 15.1% after reporting earnings back on August 1st, but the stock has now clawed almost all the way back after it gained 3.2% on Friday. We’ll cut right to the chase: we like Roku and give it A ratings in Growth and Sentiment and a B rating in Safety. The company is primed to become one of the premier ad-based streaming services as it continues to roll out its new ad network and work deals with smart TV manufacturers. Its current YTD return of 20.2% is only the beginning, in our opinion, and we give ROKU a B Zen Rating and a Buy recommendation.
🥶 NOT: Roblox (NYSE: RBLX) fell by 6.3% on Friday in what could be only the beginning of a major pullback. The company reportedly spent more than 20% of its operating costs on safety, including a new AI system designed to keep children safe, but the move could be too little too late, given that Louisiana is suing the company over child endangerment. RBLX’s Momentum (A rating) was excellent up until late last month, when the stock started consolidating due to uncertainty over its second-quarter earnings. Now, with Sentiment at an all-time low (D rating), investors are worried that the company could lose its status as the premier children’s gaming platform. We give RBLX a D Zen Rating and a Sell recommendation. The current Sentiment surrounding the stock is enough to give us pause, but its overinflated price makes it an easy sell.
🔥 HOT: Salesforce (NYSE: CRM) began to right the ship on Friday, gaining 3.9% for its largest single-day gain since the middle of May. The stock’s strong performance was fueled by a rating upgrade from D.A. Davidson and the news that Starboard Value was increasing its stake in Salesforce by 50%. CRM currently gets a B rating in Value, with its current price of $242.44 representing an excellent entry point given its growth potential. We give the stock a B Zen Rating and a Buy recommendation.
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🥶 NOT: Semiconductor equipment stock Applied Materials (NASDAQ: AMAT) lost a whopping 14.1% on Friday after its second-quarter earnings report painted a gloomy picture for the remainder of the year. The company’s projections for the current quarter came in much lower than analysts expected, with Applied Materials forecasting earnings of $2.11 per share on $6.7 billion in revenue vs consensus estimates of $2.39 per share on $7.3 billion. The issue is a lack of demand for semiconductor equipment, primarily due to U.S.-China tensions and U.S. tariffs putting a dent in global semiconductor trade. AMAT gets an A rating in Financials and a B rating in Safety, which is quite good. However, the semiconductor equipment industry gets a D rating overall, prompting us to give AMAT a C Zen Rating and a Hold recommendation.
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