Earnings Overview - More than half of the S&P 500 companies have reported Q4 earnings, with 79% of the 293 companies beating expectations [1] - S&P earnings growth is projected to increase by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth [1] - Excluding the Magnificent Seven technology stocks, Q4 earnings are expected to rise by +4.6% [1] Economic Indicators - The Q4 employment cost index is expected to rise by 0.8% [2] - December retail sales are anticipated to increase by +0.4% month-over-month [2] - January nonfarm payrolls are expected to rise by +69,000, with the unemployment rate remaining at 4.4% [2] - January average hourly earnings are projected to increase by +0.3% month-over-month and +3.7% year-over-year [2] - Initial weekly unemployment claims are expected to decrease by -7,000 to 224,000 [2] - January CPI is expected to rise by +2.5% year-over-year [2] Market Movements - The S&P 500 Index is up +0.46%, the Dow Jones is up +0.09%, and the Nasdaq 100 is up +0.61% [6] - Overseas markets are also showing positive movements, with the Euro Stoxx 50 up +0.66% and Japan's Nikkei Stock 225 up +3.89% [7] Sector Performance - Chip makers and AI-infrastructure stocks have rebounded, with Nvidia up more than +3% and AMD, Broadcom, and Western Digital up more than +2% [12] - Mining stocks are performing well, with gold prices up more than +1% and silver prices up more than +6% [13] - AppLovin is up more than +13% after positive client performance news [13] - Oracle is up more than +9% following an upgrade to buy from neutral [14] Company-Specific News - Dynatrace reported Q3 revenue of $515.5 million, exceeding consensus estimates, and raised its full-year revenue forecast [15] - Kyndryl Holdings is down more than -54% after reporting lower-than-expected Q3 revenue and cutting its profit estimate [16] - Hims & Hers Health is down more than -23% after halting sales of a new product [17] - Monday.com is down more than -21% after forecasting lower Q4 revenue [17]

The AppLovin logo arranged on a laptop in New York on Feb. 26, 2025.Short-seller CapitalWatch has issued an apology and revised its report accusing a major AppLovin shareholder of financial crimes. The report, published last month, alleged relationships between Hao Tang and criminal syndicates, which the short-seller now says is inaccurate."Descriptions asserting direct connections between Mr. Tang and Chen Zhi, Prince Group, Jin Bei Group, Tang Jun, and Yang Zhihui were inaccurate and failed to meet our pu ...

Core Viewpoint - AppLovin (APP) shares have recently declined by 14% over the past week, but the formation of a hammer chart pattern suggests potential support and a possible trend reversal in the future [1][2]. Technical Analysis - The hammer chart pattern indicates a nearing bottom with likely subsiding selling pressure, suggesting a bullish case for the stock [2]. - A hammer pattern is characterized by a small candle body with a long lower wick, indicating that despite a downtrend, buying interest has emerged to push the stock price up towards the opening price [4][5]. - The occurrence of a hammer pattern at the bottom of a downtrend signals that bears may have lost control, indicating a potential trend reversal [5]. Fundamental Analysis - Recent upward revisions in earnings estimates for AppLovin enhance its prospects for a trend reversal, as trends in earnings estimate revisions are strongly correlated with near-term stock price movements [7]. - Over the last 30 days, the consensus EPS estimate for the current year has remained unchanged, indicating that analysts expect better earnings than previously predicted [8]. - AppLovin currently holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [9][10].

Earnings Reports - A significant week for earnings with major companies such as Robinhood Markets, Coinbase, Cisco Systems, Applovin, Shopify, Arista Networks, Cloudflare, Spotify, Airbnb, and McDonald's scheduled to report [1] Implied Volatility - Implied volatility tends to be high before earnings reports due to market uncertainty, leading to increased demand for options [2] - After earnings announcements, implied volatility typically decreases to normal levels [3] Expected Price Movements - The expected price range for stocks can be estimated by adding the prices of at-the-money put and call options from the option chain [3] Daily Earnings Expectations - Tuesday: HOOD (11.7%), F (6.5%), KO (2.9%), NET (13.4%), SPOT (10.4%), GILD (5.5%) [4] - Wednesday: CSCO (5.5%), VRT (10.5%), APP (15.5%), SHOP (12.8%), MCD (3.3%) [5] - Thursday: COIN (11.1%), ANET (10.7%), ABNB (8.6%), AEM (6.9%) [5] Trading Strategies - Traders can utilize expected moves to structure trades, with bearish traders selling bear call spreads and bullish traders selling bull put spreads or looking at naked puts [6] - Neutral traders may consider iron condors, ideally keeping short strikes outside the expected range [6] Risk Management - It is advisable to use risk-defined strategies and maintain small position sizes when trading options over earnings [7] - A full loss from a trade should ideally not impact the portfolio by more than 1-3% [7] High Implied Volatility Stocks - Barchart's Stock Screener can identify stocks with high implied volatility, using filters such as total call volume greater than 5,000, market cap greater than 40 billion, and IV Rank greater than 50% [8]

Core Insights - Wall Street analysts predict significant growth in artificial intelligence (AI) stocks over the next year, with AI expected to have a transformative economic impact similar to that of the internet, but with faster adoption rates [1][2] Company Summaries AppLovin - AppLovin has a median target price implying an 89% upside from its current share price of $407, with analysts projecting adjusted earnings to grow at 48% annually over the next three years [4][8] - The company has developed a targeting engine called Axon, which utilizes AI to effectively match advertiser demand with publisher supply, enhancing its advertising capabilities [5][6] - AppLovin's mediation platform generates valuable data that improves its targeting engine's performance, leading to a 45% higher return on ad spend (ROAS) compared to Meta Platforms and a 115% higher ROAS than other platforms like YouTube and TikTok [7] Robinhood - Robinhood's median target price suggests an 81% upside from its current share price of $84, with expected adjusted earnings growth of 20% annually over the next three years [10][13] - The company has a strong market presence among younger investors, benefiting from high trading volumes and gaining market share across various brokerage services [11] - Robinhood launched an AI investment tool called Cortex, designed to assist users in making informed trading decisions by sourcing data from multiple channels [12]

Core Viewpoint - AppLovin Corporation is considered one of the most profitable new stocks to buy, despite recent valuation adjustments and industry challenges [1][6]. Group 1: Analyst Ratings and Price Targets - Wedbush analyst Michael Pachter lowered the price target for AppLovin from $800 to $465 while maintaining an Outperform rating, reflecting softer industry sentiment and regulatory challenges [1][6]. - Needham upgraded AppLovin from Hold to Buy with a price target of $700, citing increased confidence in the company's e-commerce revenue trajectory for 2026, raising estimates from $1.05 billion to $1.45 billion [3]. Group 2: Market Position and Strategic Expansion - AppLovin holds a dominant position in mobile gaming advertising and is strategically expanding into e-commerce and Connected TV, which is expected to provide long-term protection against competitive threats [2]. - The growth from the launch of a self-service platform and increased advertiser spending is projected to offset typical first-quarter seasonality [3]. Group 3: Company Overview - AppLovin builds a software-based platform for advertisers to enhance marketing and monetization of content, operating through two segments: Advertising and Apps [4].

Core Viewpoint - The sell-off in software stocks is considered overdone by Nvidia's CEO Jensen Huang, who argues that the market has overreacted to concerns about AI disrupting the software industry [1][5]. Software Industry Overview - The S&P North American Technology Software Index has declined 30% from its peak, entering bear market territory, driven by fears surrounding AI's impact on software companies [1]. - Huang believes that AI tools will complement existing software rather than replace it, suggesting that the current market sentiment is illogical [5]. Attractive Software Stocks - **Microsoft (MSFT)**: Stock down 27% from its high, currently trading at 26 times earnings, with adjusted earnings up 24% last quarter and a 160% increase in paid copilot seats [6]. - **Datadog (DDOG)**: Stock down 47% from its high, trading at 53 times adjusted earnings, with adjusted earnings increasing 20% last quarter despite high R&D spending [7]. - **AppLovin (APP)**: Stock down 52% from its high, trading at 45 times earnings, with earnings up 96% last quarter [8]. - **Atlassian (TEAM)**: Stock down 70% from its high, trading at 22 times earnings, with adjusted earnings increasing 27% last quarter [9]. - **HubSpot (HUBS)**: Stock down 73% from its high, trading at 25 times earnings, with adjusted earnings up 22% last quarter [9]. Market Outlook - While software stocks may continue to decline in the near term, long-term investors are likely to benefit from purchasing stocks at reasonable prices, anticipating significant earnings growth over the next five years [10].

Core Insights - The article emphasizes the importance of quantitative research, financial modeling, and risk management in equity valuation and market trends to identify high-growth investment opportunities [1] Group 1: Company Expertise - The company has over 20 years of experience in quantitative research and financial modeling, focusing on equity valuation and market trends [1] - The company has developed expertise in both fundamental and technical analysis through leadership roles in model validation and stress testing [1] - The research approach combines rigorous risk management with a long-term perspective on value creation, aiming to provide actionable ideas for investors [1] Group 2: Research Focus - The company has a particular interest in macroeconomic trends, corporate earnings, and financial statement analysis [1] - The goal is to uncover high-growth investment opportunities while ensuring a comprehensive understanding of market dynamics [1]

Core Insights - The article emphasizes the importance of quantitative research, financial modeling, and risk management in equity valuation and market trends to identify high-growth investment opportunities [1] Group 1: Company Expertise - The company has over 20 years of experience in quantitative research and financial modeling, focusing on equity valuation and market trends [1] - The company has developed expertise in both fundamental and technical analysis through leadership roles in model validation and stress testing [1] - The research approach combines rigorous risk management with a long-term perspective on value creation [1] Group 2: Research Focus - The company has a particular interest in macroeconomic trends, corporate earnings, and financial statement analysis [1] - The goal is to provide actionable ideas for investors seeking to outperform the market [1]

Shares of mobile game advertising engine Applovin (NASDAQ: APP) plunged this week, falling 14.9% this week through Friday as of 3:15 p.m. EDT, according to data from S&P Global Market Intelligence. Applovin's stock fell on generalized fear over two new innovations in the mobile game world. Late last week, Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) unveiled Project Genie, an AI-powered tool that allows users to create virtual worlds. Second, a new AI-based digital advertising start-up, CloudX, became generall ...