Zeta Global (ZETA) stock has suffered a harsh reversal as it fell for two consecutive weeks. It has dropped by over 23% from its highest level this year, meaning that it has moved into a deep bear market. This retreat has led to a big drop of its market cap to $6.17 billion. 

What is Zeta Global?

Zeta Global is a leading technology company in the marketing vertical. Its business provides the Zeta Marketing Platform (ZMP) that combines data, analytics, and artificial intelligence to deliver personalized marketing experiences. 

The Zeta Data Management solution brings key systems in a company in one single platform. For example, through its dashboard, one can see the number of visitors to a website, number of email subscribers, social media users, and active phone contacts. Zeta Global also has messaging and activation tools.

Zeta Global is not a popular brand among American consumers because it mostly offers its services to companies, agencies, and publishers. Some of its top customers are companies like AT&T, Toyota, Estee Lauder, and Comcast. 

According to its website, Zeta Global has over 12.7 billion unique global identifiers and 1 trillion content signals each month. It also reaches over 235 million people in the United States. 

It also helps companies to acquire customers and retain them. Its other solutions are data and identity, omnichannel marketing and agile intelligence. 

Why ZETA shares have surged

Zeta Global has been one of the best-performing companies in Wall Street as its stock jumped by over 720% from its lowest point in 2022 and its highest level this year. 

Most of this growth happened because the company has embraced the artificial intelligence technology. It uses AI and big data technology to ensure companies acquire and retain customers. 

Most AI companies like Palantir and NVIDIA have jumped sharply this year as the industry went viral. 

At the same time, Zeta’s business has continued growing, both organically and through acquisitions. Its annual revenue rose from $306 million in 2019 to over $728 million in the last financial year. 

This revenue growth will likely continue following its decision to acquire LiveIntent, a solution that will enhance its identity resolution capabilities, expand into publisher monetization, and elevate its mobile and retail media solutions. 

Zeta Global spent $250 million for the acquisition. These funds were in the form of $77.5 million in cash on hand and $172.5 million in stock. 

Read more: Nvidia (NVDA) stock could reach $10 trillion market cap by 2030, analysts predict

Strong earnings trend

Zeta Global stock has also jumped after the company announced solid financial results and thereafter increased its forward guidance. 

The most recent results showed that its revenue rose by 33% YoY in the second quarter to $228 million. This growth happened as the scaled customer account rose by eight to 468 during the quarter and its average revenue per active user (ARPU) jumped 22% to $479,000. It has had over 20% revenue growth for 14 consecutive quarters. 

Zeta Global also hinted that it will get to its 2025 revenue target of $1 billion ahead of schedulr. Also, it will get to its adjusted EBITDA of $200 million and its free cash flow of $110 million.

In a recent statement, the company upgraded its revenue guidance for the third quarter to $255 million. Before that, it had hinted that its revenue will be $239.2 million.

This revenue growth is mostly because of the ongoing political campaign, where it has become a leading player in targeting. It expects that its revenue guidance from political candidates to be at least $10 million. 

Zeta Global has a good record of beating analysts estimates, meaning that its results will be better. Its earnings will come out on November 11.

Analysts have mixed opinions on the company. Those at Keybanc expects that its revenue growth will continue, and that it will turn a profit soon. However, Barclays downgraded the company citing a challenging growth outlook. All in all, Zeta Global’s target by analyst is $36, higher than the current $26.13. 

Zeta Global stock analysis

Zeta chart by TradingView

On the daily chart, we see that the Zeta Global stock price peaked at $34.10 in October and formed a shooting star pattern, which explains why it has retreated sharply since then. 

The decline is because the company raised $204 million by selling shares, a move that diluted existing shareholders. 

Also, there is profit-taking going on since existing shareholders have been highly rewarded over time.

On the daily chart, the Zeta Global stock has dropped slightly below the 50-day Exponential Moving Average. It remains above the 100-day MA, which is a positive sign.

Zeta Global’s Relative Strength Index (RSI) has moved below the neutral point at 50, while the MACD indicator has pointed upwards. I believe that the stock will bounce back, retest the all-time high at $34, forming a double-top pattern, and then resume the downtrend. 

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The Super Micro Computer (SMCI) stock price has remained under pressure in the past few months as concerns about its business and the artificial intelligence (AI) industry. It was trading at $46.25 on Friday, down by over 62% from its highest level this year.

SMCI’s performance mirrors that of Celsius Holdings, which surged to $100 earlier this year and has now moved to $30, its lowest point since May last year. 

Supermicro is facing major headwinds

Super Micro Computer, commonly known as Supermicro, is a leading technology company that made headlines as demand for data center soared. 

The company provides servers, storage systems, workstations, and network devices that are used by some of the leading players in the industry. 

Its solutions have become highly critical as companies like Microsoft, Alphabet, and Amazon have continued to invest in data centers. Analysts estimate that these investments could cross the important milestone of $1 trillion in the next few years.

NVIDIA has become one of the biggest beneficiaries of this industry, a move that has pushed its valuation to over $3 trillion. Beneath NVIDIA, other companies like SMCI that provide solutions in the industry have also benefited.

This growth is evidenced by the company’s financial results. Data by SeekingAlpha shows that its annual revenue stood at over $3.3 billion in 2020, a figure that surged to $14.4 billion in the last financial year. Its revenue in the last quarter stood at over $5.3 billion, much higher than what it made in 2020.

Super Micro Computer has also become a highly profitable company because of the soaring demand for its products. It made a net profit of $352 million last quarter, also, much higher than the $285 million it made in 2022. 

Not everyone is convinced about SMCI’s strong growth. For example, Hindenburg Research has accused the company of manipulating its business and by re-hiring some of the staff who were let go after paying a $17.5 million settlement with the Securities and Exchange Commission (SEC). Supermicro also delayed submitting its annual 10k report. 

SMCI earnings ahead

Supermicro has made several important headlines in the past few weeks. Earlier this month, it launched new servers and GPU accelerated systems with AMD EPYC 9005 Series CPUs and Instinct GPUs. In its statement, it noted that the new products will enable up to 192 cores per CPU with up to 500W thermal power design. 

The company also introduced new liquid cooling solutions powered by NVIDIA GB200 NVL72 platform for exascale computing. 

These solutions are aimed at making it a leading player in the AI data center industry. Besides, it has now scaled its business such that it is shipping over 100,000 GPUs per quarter. 

The most recent financial results showed that Super Micro Computer’s sales jumped to $5.3 billion from $3.85 billion in the same period a year earlier. 

Its net income also jumped to $353 million from $194 million a year earlier. This happened even after its margins narrowed from 17% to 11.2%. These margins narrowed after the company continued to increase its investments by expanding its soluyions in Malaysia and California.

Therefore, traders will focus on its upcoming earnings on October 30th. Analysts expect the numbers to show that its revenue surged by 212% to $6.45 billion. Its next quarter revenue guidance will be $6.9 billion. For the next financial year, the company is expected to make $27.8 billion and $32 billion.

If these numbers are accurate, then it means that it is significantly undervalued considering its strong growth. 

Super Micro has a market value of over $26 billion, giving it a forward price-to-earnings ratio of 15.3. This is a significantly small valuation considering that the median industry average is 29 and the S&P 500 index has a multiple of 21. Analysts also expect that its stock will rise to $76.70, a 65% increase from the current level. 

Super Micro Computer stock price analysis

SMCI chart by TradingView

The weekly chart shows that the SMCI share price has been in a strong bearish trend in the past few months. It has moved from the year-to-date high of $123 to $46. 

The stock has dropped below the 50-week Exponential Moving Average. It has also found support at the 100-week and 200-week moving averages. 

On the negative side, the stock has formed a bearish flag chart pattern, which is characterised by a long vertical line and a rectangle. In most cases, this is one of the most bearish sign, meaning that the stock could have a strong bearish breakout after earnings. 

If this happens, the SMCI stock price could drop to the next key support point at $37.17, its lowest point on September 23. This view will be invalidated if it rises above the resistance point at $52.

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Morgan Stanley (MS) stock has been firing on all cylinders this year, helped by the strength of its franchise amid challenges in its key markets. It has risen in the past six consecutive weeks, moving to a record high of $120, giving it a market cap of over $194 billion. 

It has jumped by over 30% this year, beating other popular Wall Street banks like JPMorgan, Citigroup, and Wells Fargo. It has also beaten the closely-watched the SPDR S&P Bank ETF (KBE), which has risen by over 24%.

Morgan Stanley background

Morgan Stanley is one of the biggest banks in the United States. Unlike JPMorgan, Citigroup, and Bank of America, it does not provide most of its banking solutions to retail customers. 

Instead, it mostly does business with large companies, endowments, and other large institutions. Its business is divided into key segments like wealth management, investment management, and institutional securities. 

Over time, it has become the second-biggest wealth manager in the world with over $4.5 trillion in assets. It is second only to UBS, the Swiss banking giant that merged with Credit Suisse in 2023. Some of these assets came from its acquisition of Eaton Vance and E-Trade. 

The company makes money from investment banking, where it advises and underwrites transactions. This industry has been under pressure in the past few years as the amount of deals in the country have dried up.

There are signs that the industry is doing well now after some large transactions were announced. For example, Synopsys acquired ANSYS in a $35 billion deal, while Home Depot bought SRS Distribution for $18.3 billion. 

Other large deals were Capital One’s buyout of Discover Financial, Cisco’s buyout of Splunk, and HP Enterprise’s purchase of Juniper Networks.

Business is doing well

The most recent financial results showed that its revenue in the last quarter rose to $15.4 billion in the third quarter, up from $13.2 billion in the same period in 2023.

The results showed that its institutional securities revenue rose to $6.8 billion last quarter from $5.6 billion. This growth was mostly because of the strong surge of its investment banking business whose revenue jumped by 56%. 

The advisory revenue rose to $546 million, while its equity underwriting and fixed income underwriting jumped to $362 million and $555 million, respectively.

Meanwhile, Morgan Stanley’s wealth management revenue rose to $7.2 billion, as its assets under management surged. It investment management division had over $1.5 billion in revenues during the quarter. 

Catalysts remain

Morgan Stanley stock has numerous catalysts ahead. First, the Federal Reserve has already delivered one rate cut this year. However, the bond market signals that the pace of rate cuts will continue moving downward at a slower pace in the next few months. 

The 10-year yield has risen to 4.20%, while the 30-year and 2-year yields jumped to 4.45% and 4.05%, respectively. This is a sign that the market expects that rates will remain higher for longer. Indeed, the CME FedWatch tool estimates that rates will remain above 3% in December next year.

Moderately higher interest rates will be positive for Morgan Stanley because of its higher net interest margin. 

Soaring stocks and the upcoming election

At the same time, the ongoing robust performance in the stock market will lead to more wealth among the wealthy. Just this week, Elon Musk has added over $35 billion in wealth after the company surged. People like Jeff Bezos, Mark Zuckerberg, Larry Elison, and Bill Gates have all added over $20 billion in wealth. Therefore, the company will likely see more assets move to its wealth management business. 

A dovish Federal Reserve coupled with a potential Donald Trump administration will be a boom to the deal-making industry. Trump has pledged to deregulate the US, a move that could lead to more deals. Biden’s administration has in the past blocked several deals, including Capri’s merger with Tapestry.

The other potential catalyst is that private equity companies hold hundreds of companies that will need to be taken private. Morgan Stanley will likely benefit because it is one of the biggest players in the advisory industry.

Morgan Stanley stock analysis

MS chart by TradingView

The weekly chart shows that the MS share price has been in a strong bull run in the past few months. It has risen above the important resistance point at $100, its highest swing in February 2022. 

The stock has remained above the 200-week and 50-weeek Exponential Moving Averages (EMA). Also, the Relative Strength Index (RSI) has continued rising and has moved to the overbought level.

The MACD indicator has continued rising. Therefore, the stock will likely continue rising, with the next point being at $150. However, before then, the stock could retreat and retest the support at $100 and then bounce back.

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The Applied Materials (AMAT) stock price has come under intense pressure this year as investors continued to question its growth. It has dropped by over 28% from its highest level this year, meaning that it has moved into a bear market. 

Applied Materials is a top tech enabler

Applied Materials is one of the top companies in the semiconductor industry, where it provides systems used to fabricate chips. Its products are used by some of the biggest companies in the semiconductor industry like Taiwan Semiconductor, Samsung, Intel, and Micron. 

For example, Applied Materials is a leading player in technologies like epitaxy, Rapid Thermal Processing (RTP), Physical Vapor Deposition (PVD), Chemical Vapor Deposition (CVD), and Electrochemical Deposition (ECD).

AMAT also has the Applied Global Services business, which runs fab consulting, subfab equipment, automation software, and supply chain assurance programs. 

Additionally, Applied Materials is a top player in the display industry, where it makes products used in the television, smartphone, laptops, and other consumer products. 

Over time, AMAT has become one of the biggest players in key industries that are growing rapidly. For example, while NVIDIA is known for its artificial intelligence business, Applied Materials is involved behind the scenes. 

Applied Materials revenue has done well in the past few years as demand for its solutions has continued growing. Its annual revenue moved from $14.6 billion in 2018 to over $26.5 billion in the last financial year. 

This growth has mostly been organic since the company has not made any major acquisitions in the past few years.

It has instead focused on improving its offerings and gaining market share. For example, it has gained market share in the DRAM market by ten points in the last decade. 

It also expect to grow in the DRAM industry by 10% to $6.5 billion in the next few years, helped by its 4F2. Also, the management believes that transition to 3D DRAM will boost its addressable opportunity by double digits.

Read more: Applied Materials’ Sales Forecast Disappoints

AMAT’s business has stalled

The most recent financial results showed that its business has stalled. Its revenue in the last quarter grew by 8% to $6.78 billion, helped by its semiconductor systems business whose revenue rose to $4.9 billion. Its foundry and logic revenue accounted for 72% of its semiconductor systems segment. 

Applied Global Services revenue rose slightly to $1.58 billion, while its smaller display business rose to $251 million. 

These numbers mean that Applied Materials business is growing at a slower pace compared with other popular semiconductor companies like Nvidia and Super Micro Computer. 

Read more: Applied Materials stock: Key AMAT levels to watch

Applied Materials earnings

The next important catalyst for the Applied Materials stock price will be its earnings, which are scheduled for November 11. 

Analysts expect its revenues will come in at $6.95 billion, a 3.5% increase from the same period last quarter. This will be followed by an increase to $7.2 billion in the next quarter. 

For the annual financial year, analysts expect its results to show that its revenue to be $27.12 billion, a 2.3% from last year. This revenue will be followed by $30 billion in the next financial year. 

Applied Materials has a forward dividend yield of about 0.87%, which is fairly smaller than other companies. As such, by investing in it, your total investment return will likely be smaller than other firms.

On the positive side, analysts believe that its stock should be trading at $231, about 26% from its current level.

Applied Materials stock analysis

AMAT chart by TradingView

The daily chart shows that the AMAT share price has been in a strong bearish trend in the past few days. It formed a triple-top pattern at $213.50. In most periods, this is one of the most bearish patterns in the market.

The stock is also about to form a death cross pattern as the 200-day and 50-day Exponential Moving Averages (EMA) near their crossover. In most periods, a death cross is one of the most bearish patterns in the market. This cross has already formed when using the weighted moving average (WMA).

Therefore, the stock will likely have a bearish breakout as sellers target the next important support level at $171.53, its lowest point in August

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Blackstone Mortgage Trust (BXMT) looks like a good dividend company to invest in. It has an exciting dividend yield of almost 10%, trades below book value, and is part of Blackstone, the biggest private equity company in the world.

The BXMT stock price was trading at $18.55 on Friday, the same level it has been at in the past few weeks. It remains 35% above its lowest point in 2023, giving it a market cap of $3.31 billion, much lower than its $19.3 billion loan portfolio.

What is Blackstone Mortgage?

Blackstone Mortgage is a leading company that dividend-focused investors love for its long track record of dividend growth. It is a real estate finance company that provides senior loans collateralized by commercial real estate in the US, Europe, and other countries. 

The idea behind BXMT is relatively simple. It provides loans to developers and real estate companies and uses the same property as collateral. This is an important business since its manager is Blackstone, the biggest real estate investor in the world. 

Companies like BXMT have become more popular in the real estate industry after the Global Financial Crisis (GFC) of 2008/9 since banks have lowered their exposure because of strict regulations. 

BXMT’s portfolio is made up of loans across most areas in the real estate sector. Most of these loans are in the multifamily segment, followed by offices, hospitality, industrial, and non-US office. 

High interest rates

BXMT has also benefited recently from the high interest rates in the United States and its other markets. The Federal Reserve pushed interest rates to between 5.25% and 5.50% to deal with the post-Covid-19 inflation. Similarly, the European Central Bank (ECB) and the Reserve Bank of Australia (RBA) all hiked rates. 

BXMT often benefits when interest rates are higher because most of its portfolio is on floating interest rates. 

However, higher rates can be affected by higher default rates as maturities near. In the past few years, this has been talk about the wall of maturities as over $1 trillion of loans tied to the commercial real estate (CRE) sector mature.

The fear explains why BXMT stock remains about 24% below its 2021 highs. However, there is a light at the end of the tunnel as the CRE industry has avoided a 2008/9 implosion that some analysts were expecting.

There are also signs that more companies are forcing their staff to go back to the office, which is a good thing. 

Read more: Blackstone Mortgage (BXMT) stock could crash by 21% soon

Blackstone Mortgage earnings

The most recent catalyst for the BXMT stock price was its earnings for the three months to September. 

These results were fairly weaker than what it reported last year. Its interest and related income dropped to $430 million from $519 million a year earlier. Its nine-month interest income also dropped from $1.5 billion to $1.3 billion. 

Blackstone Mortgage also reported a loss during the quarter as its net loss came in at $55 million from a profit of $30.5 million. 

This loss was mostly because of credit quality, which led to higher loan losses. Worse, the management expects the losses to continue, as it added $132.5 million to its current expected credit loss (CECL). Its total CECL reserve this year has moved to over $1 billion.

These results explain why BXMT trades at a big discount to its book value. It has a price-to-book ratio of 0.8, while Starwood Property Trust (STWD), which has a better credit quality has a multiple of 1.01x. Ladder Capital Corp has a multiple of 0.95.

BXMT stock return challenges

The other thing to consider when investing in BXMT is that you should mostly ignore the 10% dividend yield and consider the total return. Ideally, in most cases, you should consider investing in a company that, at least, beats the S&P 500 index.

Blackstone Mortgage Trust has a poor record of doing that. Data shows that its total return this year was minus 4.4%. In contrast, the VOO ETF returned about 23%. As shown above, the company’s total return in the last five years was minus 18.8% compared to VOO’s 107%.

This is notable since the S&P 500 index pays a minimal dividend because of its historical performance. 

A point can also be made on investing in government bonds instead of BXMT for now since the ten-year is yielding over 4%. This means that it is doing better than BXMT.

BXMT chart by TradingView

On the positive side, the BXMT stock has formed a triangle pattern on the weekly chart, meaning that it could stage a strong comeback in the coming months. If this happens, the stock will climb from $18.7 to $24.5, its highest level in 2022, which is about 32% above the current level.

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