Applied Optoelectronics (AAOI)
Entry: Unlock
Price target: 20.00-21.00
Second PT: Unlock
Analysis done on hourly timeframe. Applied Optoelectronics is a small company that has positioned itself in the hottest industries of the current times. The electronic technology and semiconductor company is involved in the design and manufacturing of optical communications products, basically allowing systems to communicate and improve efficiency. The company’s most credible backing came from Microsoft, who inked a deal with them to create advanced lasers for Microsoft’s data centers.
This involvement with data centers is perhaps the company’s biggest highlight right now. Demand for biggest and better data centers is soaring, which will ultimately help AAOI in their business.
Despite all the positive aspects of the company, we must also note the cons that this name is accompanied by. In terms of revenue, AAOI has flatlined for years now, with revenue stuck around $200M annually and net income constantly in the negative. Their balance sheet is moving in the wrong direction and they do not have any free cash flow at hand. This explains why the betting market is shorting 29% of its shares. This is a name to play on the short term hype around data centers and AI advancements, not yet a name to consider as a safe long term bet.
Halozyme Therapeutics (HALO)
Entry: Unlock
Price target: 62.00-63.00
Second PT: Unlock
Analysis done on hourly timeframe. Halozyme Therapeutics saw an influx of buying volume last week following the company’s latest earnings data. The biotech company beat on both revenue and profit estimates, and more importantly raised their forward guidance. Halozyme has already been one of the best performers in its industry this year, and these earnings are likely to boost it even higher.
Looking at their past earnings, the company has satisfied its investors by consistently posting growth for the past five years. Revenue grew from just under $200M in 2019 to more than $800M in 2023. This growth accompanied larger profits, which places the company at a price to earnings ratio of 17x, on the low end of the health 15-25 range.
With a market cap of only $7B, Halozyme has room to grow as they continue to increase earnings. A catalyst such as last week’s report could set them up for more highs as investors take notice.
Costco (COST)
Entry: Unlock
Price target: 970.00-980.00
Second PT: Unlock
Analysis done on daily timeframe. Costco shares have pulled back in recent weeks following the company’s earnings release, moving to retest the 100 day moving average for the first time since August. Shares of Costco have nearly doubled in the past 12 months, pushing higher as the company continues to impress on earnings.
The wholesalers revenue grew from $242B in 2023 to $254B in 2024, a modest 5% growth; however their net income grew significantly by 17%. The company’s long history of satisfying investors through consistency and dividend hikes has made it a favorite, and as it trades back at its key support, it may be time to begin a position once again.
Our approach on Costco is a simple one. We’re looking for buyers to defend the 100 MA and buy the stock near this level; if they do then it can set it up for a move to retest its all time highs. If it doesn’t hold, then the company may be on track for a further correction, which will grant us entry at a later point.
Please note that COST is trading at a price to earnings ratio of 53x, so while it is an attractive buy on its technicals, the stock may still be due for a further correction in the future if they can’t boost profit margins higher. The short term does indicate a possible bullish reversal, but it’s important to note any fundamental weaknesses.
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You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here to start a FREE trial.
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here to start a FREE trial.
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here to start a FREE trial.
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The stocks posted above are the preliminary stocks and set ups we’ll be watching this week. All price points are subject to change based on market performance and sector health. Please do your own research and analysis on these companies/charts before taking on any set ups. Trade at your own risk and as always, good luck! Let’s have a fantastic week.