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CAVA Group stock is overvalued: levels to watch after earnings?

CAVA Group (CAVA) stock price has jumped to a record high, making it one of the best-performing cryptocurrencies in the industry. It soared to $151.4 on Monday as investors waited for its third-quarter earnings, which will provide more color about its business. It has jumped by over 416% from its lowest level on record, bringing its market cap to over $16 billion.

CAVA Group stock rises ahead of earnings

CAVA Group has been one of the top-performing restaurant stocks this year as investors compare its growth trajectory with that of Chipotle Mexican Grill, a company that has become valued at over $80 billion.

That’s because the two companies are largely similar, with the only difference being the region of the meals they prepare. CAVA Group focuses on Mediterranean dishes, while the Chipotle Mexican Grill has become the biggest Mexican food restaurant in the US.

The next important catalyst for the CAVA Group stock will come on Wednesday when the company publishes its financial results. 

Analysts expect these numbers to show that its revenue rose by 33.10% in the third quarter to over $233 million. Based on its historical performance after going public in 2023, chances are that the company’s results will be better than estimates. 

The highest CAVA Group revenue estimate is $243 million, while the lowest one is $217 million. Meanwhile, analysts expect its earnings per share will grow from $0.06 in the third quarter of 2023 to $0.11. 

Meanwhile, its guidance for fourth-quarter revenue will be $212 million, a 20% increase. For the year, analysts believe that CAVA Group’s revenue will rise by 28.7% to over $938 million followed by $1.1 billion in 2025.

CAVA’s growth happened as the company continued to add more restaurants in the United States. It has 341 restaurants, up from the 279 it had in the second quarter of last year. For the year, CAVA Group plans to add between 54 and 57 restaurants.

It has also added a few products in its menu, which has attracted more customers to its stores.

CAVA is a profitable company

What sets Cava Group from other growing companies is that it has already achieved profitability. The most recent quarterly results showed that its same store sales rose by 14.4%, while the amount of traffic rose by 9.5%.

CAVA Group achieved an adjusted EBITDA of over $34.3 million or 14.7% of its revenue. Most importantly, its margins are rising, with restaurant ones moving to 26.5%. 

In addition to this, the company also has a strong balance sheet with over $347 million in cash and short-term investments and no debt.

Still, the main concern for the CAVA Group stock is that it is severely overvalued. For one, its $16 billion market cap means that each of its 341 restaurants are valued at $47.2 million. In contrast, Chipotle has a market cap of $80 billion and 3,500 restaurants, meaning that each is valued at about $22.8 million. 

CAVA Group’s estimated revenue for this year is $938 million, meaning that each store will have $2.75 million in sales. In Chipotle’s case, its revenue will be $11.32 billion, meaning that its stores will make $3.23 million. These numbers mean that CAVA Group is severely overvalued.

CAVA Group stock price analysis

CAVA chart by TradingView

The daily chart shows that the CAVA share price has been in a strong bullish trend in the past few months. It has jumped above the 50-day moving average, while the Relative Strength Index (RSI) and the MACD indicators have all pointed upwards.

Therefore, there are two potential scenarios for the CAVA stock price after its earnings report on Tuesday. The most likely scenario is where the stock drops to the key support at $128.88, its highest swing on September 23. 

The other scenario is where the CAVA stock surges, and potentially rises to the key resistance level at $170. 

The post CAVA Group stock is overvalued: levels to watch after earnings? appeared first on Invezz

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Rocket Lab stock: RKLB Could rise or fall 40% after earnings

Rocket Lab stock price has gone parabolic, rising in the last five consecutive weeks, and reaching its highest level since November 2021. The RKLB share price has jumped by 320% from its lowest level this year, bringing its market cap to over $6.7 billion. 

Rocket Lab stock price surges ahead of earnings

Rocket Lab share price has done well this year as the company continued to gain market share in the space industry amid Boeing’s woes. Most recently, the company won a large NASA study contract, worth millions.

Rocket Lab is a top industrial company in the space industry, where it offers end-to-end space solutions to companies and government agencies. It has become a popular name because of its innovations, including 3D printing and automation. The company has space launches in New Zealand and in the US.

Rocket Lab has two products in its ecosystem: Electron and Neutron. Electron is a product that is designed to launch small satellites with a maximum weight of 300 kilograms, while Neutron is made for medium launches, where demand is growing.  

Data shows that 10,000 satellite launches are needed by 2030 and that the total addressable market has jumped to $10 billion.

The next key catalyst for the RKLB stock price is the earnings, which will come out on Tuesday after the market closes. 

The most recent results showed that its revenue jumped to a record high of $106 million as it launched satellites for companies like Kineis, Synpspective, and the Korean Advanced Institute of Science and Technology. 

Most notably, the company launched its 50th Electron mission at the faster pace than all commercial rockets in the industry. Rocket Lab also announced 17 launch contracts, which pushed its order backlog to over $1 billion. 

Analysts expect that Rocket Lab’s revenue will come in at $102.28 million, with the low and higher estimates being $102 million and $99.80 million. In its last earnings, RKLB provided a revenue guidance of between $100 million and $105 million. 

Most of this revenue will come from the space systems, which will make between $79 million and $84 million. Its gross margins are expected to move between 25% and 27%.

Is the RKLB stock overvalued?

The key concern for the RKLB stock price is whether it has become highly overvalued, which explains why it has a short interest of 12.5%. Besides, this is a highly-loss-making company that has a market cap of over $6 billion. 

Rocket Lab proponents point to its strong growth trajectory. Data shows that its revenue will jump to $423 million this year, up by over 73% from the $244 million it made last year. 

Its revenue will then move to $596 million, up by 40% from what it will make this year. If this trend continues, analysts expect that Rocket Lab’s revenue will get to over $1 billion in the next three or four years, helping to justify the current valuation metric.

The challenge, however, is that Rocket Lab will likely not turn a profit in the near term. It has gross margins of about 25% and a net income margin of minus 54%. Its EBITDA margin has moved to minus 43.26%.

As a result, it may need to raise more cash in the coming months. The company ended the last quarter with over $340 million in cash and equivalents. It also has over $155 million in marketable securities and $104 million in inventories.

Read more: Avoid Virgin Galactic stock: buy Rocket Lab instead

Rocket Lab stock price analysis

RKLB chart by TradingView

The weekly chart shows that the RKLB stock price formed a major bottom at $3.66, where it failed to move below since 2023. It has also moved above the crucial resistance level at $8.05, its highest point on June 23.

Rocket Lab share price has moved above the 25-week and 15-week moving averages. It has also jumped above the 61.8% Fibonacci Retracement level.

The MACD and the Relative Strength Index (RSI) have continued rising in the past few weeks, moving to the overbought level.

Therefore, more gains could push the Rocket Lab share price up by 44.4% to an all-time high of $21.32. The alternative for this view is where the stock drops to the crucial support at $8, which is also 8% below the current level. 

The post Rocket Lab stock: RKLB Could rise or fall 40% after earnings appeared first on Invezz

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Alibaba stock price forecast: BABA could surge 90% soon

Alibaba stock price has nosedived even after Beijing announced a $1.4 trillion plan to rescue the troubled economy. BABA has retreated in the past six consecutive weeks as investors react to Donald Trump’s win and its implication for the Chinese-US relationship. It dropped to $95.4, down by 20% from its highest level this year. 

Alibaba stock drops after Trump election

BABA share price has been in a strong sell-off after Trump’s win raised the possibility of a tense relationship between the United States and China. 

The tensions rose after the New York Times reported that Trump had picked Marco Rubio, a Senator from Florida to become the Secretary of State in his administration. Rubio is one of the top China hawks in the Senate, meaning that relations will escalate.

Trump has also threatened to be tough on China, including by imposing tariffs in his bid to lower the trade surplus. As with the last administration, there is a likelihood that delisting Chinese companies from US bourses could be an option. 

The other option that could hurt Alibaba is limiting American technology like semiconductors from being sold to the firm. These measures could hurt the company, especially its cloud-computing division, which aims to be China’s alternative to Amazon’s AWS. 

Still, it is unclear whether these measures will have a major impact on Alibaba in terms of its revenue growth. For one, more tariffs on Chinese goods, as we have seen in the past, have not had an impact on the volume it sells to the country. 

BABA earnings ahead

The next important catalyst for Alibaba’s stock price will come out on Friday when the company publishes its financial results. 

These results will show whether the company’s growth is continuing or whether it has continued to slow. The average revenue estimate for its revenue is $33.27 billion, up by just 5.4% from the same period last year.  The highest revenue estimate is $34.2 billion, while the lower estimate is $32.9 billion. 

Alibaba’s earnings per share is expected to have dropped in the last quarter. Precisely, analysts expect that the EPS will be $2.07, lower than the $2.17 it made last year. 

A key challenge for Alibaba is that the Chinese economy is not doing well, and the recently announced stimulus will be aimed at local governments and not areas that would spur consumer spending. Chinese retail sales and inflation have remained under pressure in the past few months.

The other key challenge for Alibaba stock is that its cloud computing division is not growing as fast as its peers. Its revenue rose by just 6% in the second quarter to $3.6 billion, while its top competitors like AWS and Azure jumped by double digits.

The main issue with Alibaba Cloud is that its business mainly targets Chinese companies and has struggled to grow internationally. 

Analysts are bullish on Alibaba share price

Wall Street analysts are generally bullish on the BABA stock price. 47 of the 48 analysts who have shared their outlooks have a buy or a strong buy rating. Only one analyst has a hold rating. Some of the most bullish analysts are from companies like Barclays, Goldman Sachs, Baird, and JP Morgan.

The average Alibaba stock price forecast among analysts is $119, much higher than the current $84.54. This target implies a 255 upside from the current level.

Most analysts believe that Alibaba is highly undervalued and that its large share buybacks will lead to more upside.

Read more: Buy Alibaba stock for a 50% return over the next twelve months: Loop Capital

Alibaba stock price analysis

BABA chart by TradingView

The weekly chart shows that the BABA share price has pulled back, falling in the past six consecutive weeks. This retreat happened after it retested the crucial resistance point at $116.51, its highest swing in January 2023 and the 23.6% Fibonacci Retracement level.

The stock has formed a cup and handle pattern, one of the most popular bullish signs in the market. Also, it has remained above the 50-week and 100-week exponential moving averages, meaning that bulls are in control for now.

Therefore, the Alibaba stock price will likely have a bullish breakout, with the next point to watch being at $182.62, up by 91% from its current level.

The post Alibaba stock price forecast: BABA could surge 90% soon appeared first on Invezz

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Salesforce stock gets pricey as CRM hits ATH: What next?

Salesforce stock price is firing on all cylinders, making it one of the best-performing companies in the Dow Jones Industrial Average. It has risen in the past ten consecutive weeks, its longest winning streak since 2017. As a result, it has jumped to a record high, giving it a market cap of over $307 billion. 

Salesforce stock price stages a massive comeback

CRM stock price has done well in the past few months, ending one of its treacherous periods when it crashed to a low of $126.20 in 2023. At the time, several activist investors like Starboard and Elliot Management intervened and pushed substantial changes.

Salesforce slowed down its acquisitions trends and also announced substantial layoffs in a bid to boost efficiency and increase profits. 

Recently, however, the stock has been in a strong bull run and is sitting at its all-time high, as we predicted earlier this year. On the weekly chart, we see that the CRM share price has been in a strong bull run, crossing the important resistance level at $316.65, its highest swing in February this year.

By moving above that level, Salesforce stock has invalidated the double-top pattern that was forming and whose neckline was at $211.3, its lowest point on May 28. 

CRM shares have remained above all moving averages, while the Relative Strength Index (RSI) and the MACD indicators have all pointed upwards. 

Therefore, using trend-following principles, the stock’s outlook is bullish, with the next point to watch being at $400, implying a 17% jump from the current level. On the flip side, a drop below the key psychological point at $280 will invalidate the bullish view.

CRM chart by TradingView

Strong growth and artificial intelligence 

The Salesforce stock price has jumped sharply, helped by its investments in artificial intelligence. It has inked a long-term partnership with NVIDIA, the biggest company in the world.

Also, it recently launched AgentForce, its AI solution that helps companies create their autonomous AI agents. Some of the firms using AgentFirce are Wiley, OpenTable, and Saks.

The most recent financial results showed that Salesforce’s revenue rose by 8% to $9.33 billion. Most of its revenue growth was in its subscription and support divisions, which grew by 10%. This growth, was however, weaker than the 12% it grew in the same period last year.

Salesforce also continued to return funds to its shareholders. It repurchased stock worth $4.3 billion in the second quarter and $0.4 billion in dividends.

Read more: Salesforce announces first-ever dividend as Q4 earnings beat expectations

CRM believes that its business will continue doing well. It expects that its third-quarter revenue will be between $9.3 billion and $9.36 billion. If that is correct, its annual revenue will be between $37.7 billion and $38 billion. 

Analysts expect the upcoming earnings to show that its revenue rose to $9.3 billion, while its annual figure will be $37.86 billion. CRM has a long track record of beating analysts’ estimates. For example, its last earnings per share was higher than estimates by 20 cents. 

A key concern is that Salesforce stock price is severely overvalued. It has a forward price-to-earnings ratio of 52.57, much higher than the sector median of 30.6. This makes it more valuable than companies like Nvidia and Microsoft which are growing at a faster rate. 

The best approach to value a SaaS company is known as the rule of 40, which looks at the growth trends and its margins. In Salesforce’s case, it has a net income margin of 15.4% and revenue growth of 8%, giving it a figure of 23%. This means that the firm is severely overvalued since the ideal figure is usually 40 and above.

Salesforce stock price will likely continue doing well if the company publishes strong financial results. Its next earnings will come out on November 27. 

The post Salesforce stock gets pricey as CRM hits ATH: What next? appeared first on Invezz

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Alibaba stock price forecast: BABA could surge 90% soon

Alibaba stock price has nosedived even after Beijing announced a $1.4 trillion plan to rescue the troubled economy. BABA has retreated in the past six consecutive weeks as investors react to Donald Trump’s win and its implication for the Chinese-US relationship. It dropped to $95.4, down by 20% from its highest level this year. 

Alibaba stock drops after Trump election

BABA share price has been in a strong sell-off after Trump’s win raised the possibility of a tense relationship between the United States and China. 

The tensions rose after the New York Times reported that Trump had picked Marco Rubio, a Senator from Florida to become the Secretary of State in his administration. Rubio is one of the top China hawks in the Senate, meaning that relations will escalate.

Trump has also threatened to be tough on China, including by imposing tariffs in his bid to lower the trade surplus. As with the last administration, there is a likelihood that delisting Chinese companies from US bourses could be an option. 

The other option that could hurt Alibaba is limiting American technology like semiconductors from being sold to the firm. These measures could hurt the company, especially its cloud-computing division, which aims to be China’s alternative to Amazon’s AWS. 

Still, it is unclear whether these measures will have a major impact on Alibaba in terms of its revenue growth. For one, more tariffs on Chinese goods, as we have seen in the past, have not had an impact on the volume it sells to the country. 

BABA earnings ahead

The next important catalyst for Alibaba’s stock price will come out on Friday when the company publishes its financial results. 

These results will show whether the company’s growth is continuing or whether it has continued to slow. The average revenue estimate for its revenue is $33.27 billion, up by just 5.4% from the same period last year.  The highest revenue estimate is $34.2 billion, while the lower estimate is $32.9 billion. 

Alibaba’s earnings per share is expected to have dropped in the last quarter. Precisely, analysts expect that the EPS will be $2.07, lower than the $2.17 it made last year. 

A key challenge for Alibaba is that the Chinese economy is not doing well, and the recently announced stimulus will be aimed at local governments and not areas that would spur consumer spending. Chinese retail sales and inflation have remained under pressure in the past few months.

The other key challenge for Alibaba stock is that its cloud computing division is not growing as fast as its peers. Its revenue rose by just 6% in the second quarter to $3.6 billion, while its top competitors like AWS and Azure jumped by double digits.

The main issue with Alibaba Cloud is that its business mainly targets Chinese companies and has struggled to grow internationally. 

Analysts are bullish on Alibaba share price

Wall Street analysts are generally bullish on the BABA stock price. 47 of the 48 analysts who have shared their outlooks have a buy or a strong buy rating. Only one analyst has a hold rating. Some of the most bullish analysts are from companies like Barclays, Goldman Sachs, Baird, and JP Morgan.

The average Alibaba stock price forecast among analysts is $119, much higher than the current $84.54. This target implies a 255 upside from the current level.

Most analysts believe that Alibaba is highly undervalued and that its large share buybacks will lead to more upside.

Read more: Buy Alibaba stock for a 50% return over the next twelve months: Loop Capital

Alibaba stock price analysis

BABA chart by TradingView

The weekly chart shows that the BABA share price has pulled back, falling in the past six consecutive weeks. This retreat happened after it retested the crucial resistance point at $116.51, its highest swing in January 2023 and the 23.6% Fibonacci Retracement level.

The stock has formed a cup and handle pattern, one of the most popular bullish signs in the market. Also, it has remained above the 50-week and 100-week exponential moving averages, meaning that bulls are in control for now.

Therefore, the Alibaba stock price will likely have a bullish breakout, with the next point to watch being at $182.62, up by 91% from its current level.

The post Alibaba stock price forecast: BABA could surge 90% soon appeared first on Invezz

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Trump win boosts Musk’s fortune by $70 billion as Tesla stock surges

Elon Musk’s investments in Donald Trump’s presidential campaign have yielded a substantial return.

Since Trump’s victory, Musk’s net worth has skyrocketed by approximately $70 billion, largely due to a dramatic surge in Tesla’s stock price.

In the last four trading days following the election, Tesla’s stock price soared by an impressive 39%, propelling the company’s market capitalization well beyond $1 trillion.

This remarkable performance has significantly boosted Musk’s fortune, which is largely tied to his Tesla holdings.

Musk’s all-in approach to supporting trump

Elon Musk’s backing of Trump has gone well beyond mere financial assistance.

He spearheaded a voter registration drive, actively participated in campaign rallies, and offered $1 million giveaways to registered voters who signed petitions for his America PAC.

The billionaire also leveraged his social media platform, X (formerly Twitter), to champion Trump’s candidacy and frequently disseminate information about his opponent and various political issues.

From Mar-a-Lago to the White House: Musk’s influence on the Trump administration

Musk’s influence appears to extend beyond the campaign trail itself.

NBC News reported that he participated in a phone call between Trump and Ukrainian President Volodymyr Zelenskyy, meanwhile reports in The New York Times and ABC suggest that the X boss has been involved in discussions regarding staffing decisions for the new administration.

He has also been a frequent visitor at Trump’s Mar-a-Lago resort.

Brendan Carr, a potential nominee for the Federal Communications Commission, is considered a close ally of Musk.

Regulatory relief on the horizon? Musk’s companies poised to benefit

Musk has long advocated for reduced regulatory oversight, aiming to remove obstacles for his diverse business ventures, including Tesla, X, SpaceX, xAI, Neuralink, and the Boring Company.

These companies currently face numerous federal investigations and lawsuits related to various allegations, including securities law violations, workplace safety issues, environmental violations, consumer fraud, and vehicle safety defects.

Given the executive branch’s significant influence over regulatory bodies, Musk anticipates a more favorable regulatory environment under a Trump presidency.

Gene Munster of Deepwater Asset Management, a long-time Tesla bull, commented on CNBC, “He’s got the golden touch right now and has the ear.” Munster added that SpaceX and xAI are also likely to benefit from a Trump administration.

He concluded,

I’m stretched to try to find out how this could play out negative for Elon.

A rising tide: other tech billionaires benefit from Trump’s win

Musk and Larry Ellison, Oracle founder and the world’s second-richest person, are not the only tech billionaires experiencing post-election gains. Ellison, a close friend of Musk and a long-time Republican donor, has seen his net worth increase by about $20 billion due to Oracle’s 10% stock surge.

Coinbase CEO Brian Armstrong has also added approximately $4.5 billion to his wealth since Trump’s victory, with Coinbase shares soaring by 67% since the election.

The cryptocurrency exchange actively supported pro-crypto candidates, largely through the Fairshake PAC, setting the stage for a potentially more favorable regulatory environment for the crypto industry, which is also a win for Tesla, given its significant digital asset holdings currently valued at $729 million.

The rally in cryptocurrencies, with Bitcoin hitting a record high of over $88,000, further enhances Tesla’s financial position.

These developments paint a positive picture for Musk’s business empire under a Trump presidency.

The post Trump win boosts Musk’s fortune by $70 billion as Tesla stock surges appeared first on Invezz

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Trump meme coin PNUT skyrockets 320% in 24 hours after election victory

Following Donald Trump’s re-election in the 2024 US election, Trump-themed meme coins have surged in value.

Leading this trend is Peanut the Squirrel (PNUT), a meme coin that saw an astonishing 320% price increase in just 24 hours.

The spike has been attributed not only to excitement surrounding Trump’s victory but also to new PNUT listings on prominent exchanges like Binance and Crypto.com, sparking massive trading volumes and heightened market interest.

PNUT prices skyrocket with Binance and Crypto.com listings

The recent listings of PNUT on Binance and Crypto.com have driven a sharp rise in the token’s value, with the Binance listing alone contributing significantly to PNUT’s 320% surge.

At the time of writing, the coin’s current price has now reached $0.4835, marking a substantial increase in a single day.

Source: CoinMarketCap

Over the past week, PNUT has climbed by 1300%, pushing its market capitalisation from $95 million to an impressive $517 million, making it the 215th largest cryptocurrency by market value.

This rapid growth highlights the impact of mainstream exchange listings on meme coins and the role of Trump’s political influence on their appeal.

Political backing boosts PNUT’s rally

Along with the listing-driven price spike, PNUT received support from influential figures.

Reports indicate that Trump received a donation of 1.7% of PNUT’s total supply, further amplifying interest in the coin.

The timing of this donation, following Binance’s listing announcement, appears to have accelerated the token’s popularity.

Elon Musk expressed support for PNUT on a recent episode of Joe Rogan’s podcast, adding fuel to the growing hype.

Musk’s endorsement, combined with the ongoing excitement from Trump’s win, has given PNUT a unique political and social media-driven momentum.

Trump’s expanding cryptocurrency portfolio gains attention

Beyond his support for PNUT, Trump’s cryptocurrency holdings have drawn increased interest.

According to data from Arkham Intelligence, Trump holds a diverse set of assets in his crypto wallet, including 495.535 Ethereum (ETH) valued at approximately $1.65 million, and 478.7111 Wrapped Ethereum (wETH) worth around $1.59 million.

Trump also possesses around 579.29K MAGA tokens valued at $1.04 million, along with a stablecoin reserve of 137,000 USDC (around $137,000).

His holdings reflect a strategic diversification within the meme and major crypto token sectors, underscoring his interest in digital assets.

TROG: A new addition to Trump’s meme coin investments

One of Trump’s latest acquisitions includes TROG, a frog-themed meme coin that draws inspiration from his public image.

Trump reportedly owns around 210.345 billion TROG tokens, valued at approximately $994,930.

TROG’s value is largely driven by its novelty and association with Trump, as meme coins often thrive on unique themes and community engagement.

This recent addition aligns with Trump’s established interest in meme coins, particularly those themed around his persona or political image, further cementing his role in the meme coin space.

Market reaction

The excitement surrounding Trump’s re-election and his public support of meme coins has created a ripple effect across the cryptocurrency market.

Meme coins such as PNUT, MAGA, and TROG have all seen increased trading volumes and higher values.

The market response suggests that Trump-themed coins may continue to experience interest from politically motivated investors and retail traders.

While these assets are inherently volatile, the fusion of politics and digital currency trading adds a unique layer to their appeal and potential market value.

As Trump’s influence in the cryptocurrency market grows, so does the speculation surrounding his meme coin investments.

The popularity of coins like PNUT and TROG reflects a trend where social and political factors are shaping investor behaviour in the crypto space.

With continued support from high-profile figures like Musk, these meme coins may sustain their popularity.

Their long-term performance remains uncertain, as their prices are closely tied to social trends and external political events, making them high-risk investments with potential short-term gains.

The post Trump meme coin PNUT skyrockets 320% in 24 hours after election victory appeared first on Invezz

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Salesforce stock gets pricey as CRM hits ATH: What next?

Salesforce stock price is firing on all cylinders, making it one of the best-performing companies in the Dow Jones Industrial Average. It has risen in the past ten consecutive weeks, its longest winning streak since 2017. As a result, it has jumped to a record high, giving it a market cap of over $307 billion. 

Salesforce stock price stages a massive comeback

CRM stock price has done well in the past few months, ending one of its treacherous periods when it crashed to a low of $126.20 in 2023. At the time, several activist investors like Starboard and Elliot Management intervened and pushed substantial changes.

Salesforce slowed down its acquisitions trends and also announced substantial layoffs in a bid to boost efficiency and increase profits. 

Recently, however, the stock has been in a strong bull run and is sitting at its all-time high, as we predicted earlier this year. On the weekly chart, we see that the CRM share price has been in a strong bull run, crossing the important resistance level at $316.65, its highest swing in February this year.

By moving above that level, Salesforce stock has invalidated the double-top pattern that was forming and whose neckline was at $211.3, its lowest point on May 28. 

CRM shares have remained above all moving averages, while the Relative Strength Index (RSI) and the MACD indicators have all pointed upwards. 

Therefore, using trend-following principles, the stock’s outlook is bullish, with the next point to watch being at $400, implying a 17% jump from the current level. On the flip side, a drop below the key psychological point at $280 will invalidate the bullish view.

CRM chart by TradingView

Strong growth and artificial intelligence 

The Salesforce stock price has jumped sharply, helped by its investments in artificial intelligence. It has inked a long-term partnership with NVIDIA, the biggest company in the world.

Also, it recently launched AgentForce, its AI solution that helps companies create their autonomous AI agents. Some of the firms using AgentFirce are Wiley, OpenTable, and Saks.

The most recent financial results showed that Salesforce’s revenue rose by 8% to $9.33 billion. Most of its revenue growth was in its subscription and support divisions, which grew by 10%. This growth, was however, weaker than the 12% it grew in the same period last year.

Salesforce also continued to return funds to its shareholders. It repurchased stock worth $4.3 billion in the second quarter and $0.4 billion in dividends.

Read more: Salesforce announces first-ever dividend as Q4 earnings beat expectations

CRM believes that its business will continue doing well. It expects that its third-quarter revenue will be between $9.3 billion and $9.36 billion. If that is correct, its annual revenue will be between $37.7 billion and $38 billion. 

Analysts expect the upcoming earnings to show that its revenue rose to $9.3 billion, while its annual figure will be $37.86 billion. CRM has a long track record of beating analysts’ estimates. For example, its last earnings per share was higher than estimates by 20 cents. 

A key concern is that Salesforce stock price is severely overvalued. It has a forward price-to-earnings ratio of 52.57, much higher than the sector median of 30.6. This makes it more valuable than companies like Nvidia and Microsoft which are growing at a faster rate. 

The best approach to value a SaaS company is known as the rule of 40, which looks at the growth trends and its margins. In Salesforce’s case, it has a net income margin of 15.4% and revenue growth of 8%, giving it a figure of 23%. This means that the firm is severely overvalued since the ideal figure is usually 40 and above.

Salesforce stock price will likely continue doing well if the company publishes strong financial results. Its next earnings will come out on November 27. 

The post Salesforce stock gets pricey as CRM hits ATH: What next? appeared first on Invezz

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Trump’s peace plan: can it reset Ukraine’s future?

Donald Trump’s re-election as US President has quickly reignited debates over America’s foreign policy direction, particularly concerning the Ukraine conflict. 

In a recent discussion with the Ukrainian President, Trump has proposed an 800-mile buffer zone between Ukraine and Russia, enforced not by US troops but by European forces. 

This move aims to solidify the ceasefire while freezing Russia’s territorial gains and preventing Ukraine from joining NATO for 20 years.

The plan however, places the onus of peacekeeping directly on Europe, potentially altering US engagement in the region completely.

Over the past few days, Donald Trump has met with both the Ukrainian and Russian presidents.

These back-to-back meetings indicate that the new US President is serious about finding a resolution to this conflict.

European troops to police the zone?

Central to Trump’s proposal is the deployment of British and European troops to maintain a new 800-mile demilitarized zone between Ukraine and Russia.

This initiative not only aims to stabilize the region but also reflects Trump’s broader foreign policy objective to reduce America’s military expenditures and direct involvement overseas.

By shifting the peacekeeping burden to European allies, Trump argues that the US can better allocate its defense resources elsewhere. 

The plan occurs as the Biden administration makes a final push to fast-track $9 billion in military aid to Ukraine, a move meant to shore up Kyiv’s defenses before Trump takes office. 

Critics argue that Trump’s proposal could strain NATO unity and increase burdens on European nations, which are already grappling with domestic economic issues and rising defense costs.

They fear that increased military spending could be unsustainable for some European economies, potentially leading to deeper financial crises. 

Additionally, requiring European troops to police the zone introduces complexities regarding rules of engagement, logistics, and the potential for direct confrontation with Russian forces, complicating an already volatile security situation.

Zelenskyy’s stance

Ukrainian President Volodymyr Zelenskyy has publicly voiced his reservations about the feasibility of Trump’s rapid peace deal, particularly concerning the substantial concessions to Russia that it entails.

Zelenskyy has pointed to past failures, such as the 2014 ceasefire, which led to the loss of Crimea and escalated military conflicts.

This agreement not only failed to bring lasting peace but directly preceded the loss of Crimea and a subsequent escalation in military conflicts. 

Zelenskyy contends that a hastily arranged, unenforceable ceasefire under Trump’s current plan could lead to further erosion of Ukrainian sovereignty and territorial integrity.

He argues that any peace efforts must ensure Ukraine’s national integrity and align with its long-term strategic goals, including its aspirations to join NATO. 

The Ukrainian leader’s skepticism is rooted in concerns that conceding too much to Russia could set a dangerous precedent, emboldening further aggression not only in Ukraine but across Eastern Europe, thereby undermining the security architecture that has governed the post-Cold War era.

Elon Musk’s involvement

Further complicating the geopolitical narrative is Elon Musk’s unexpected participation in discussions. 

Musk, having campaigned vigorously for Trump and provided crucial satellite communications through Starlink to Ukraine, adds a layer of civilian influence rarely seen in diplomatic negotiations. 

At the same time however, reports suggest Musk has been in communication with Russian President Vladimir Putin. Together they have been discussing sensitive topics such as Starlink’s operations over Taiwan.

The overall situation has become more complex through Musk’s involvement with many now left wondering about the role of private individuals in public international conflicts.

Will the plan work?

The feasibility of Trump’s peace plan hinges on several complex factors. 

First, the demand that Europe take on more responsibility for maintaining peace comes at a difficult moment.

European defense spending is currently under intense scrutiny, and public opinion is sharply divided over increasing military engagements. 

Additionally, the success of the plan also depends on Russian cooperation.

Acceptance of the ceasefire and territorial agreements by Russia is crucial, as these issues have historically led to contention and escalation of conflict. 

For Ukraine, the stakes couldn’t be higher.

National integrity and future aspirations to join NATO are in jeopardy.

President Volodymyr Zelenskyy’s government faces the daunting task of navigating both internal pressures and a complex geopolitical landscape to secure an outcome that safeguards Ukraine’s sovereignty and aligns with its national interests.

As Trump prepares for discussions with Putin and European leaders, the international community watches closely. 

The outcome of these talks could redefine Eastern European security architecture, shift NATO’s strategic priorities, and alter the course of the US-Europe relations.

While the plan proposes a structured approach to resolving one of the most volatile conflicts of the past decade, its acceptance and implementation carry profound implications for all involved, offering a unique lens into the power dynamics and alliances that shape our world today.

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