Adobe has a market-leading position in creative software suites and document handling tools, giving it an excellent platform to introduce AI enhancements. With extensive R&D in the space, is there growth to show of it? Or has the valuation multiple simply been unrealistic, creating a potential opportunity after substantial underperformance vs. the index in 2024?
Intuit owns software-as-a-service platforms that are a feature of so many small businesses. QuickBooks and MailChimp are common choices for accounting and mailing list solutions, while TurboTax has a huge customer base in the US across personal and business users. There are other businesses like Credit Karma, aimed at personal finance users. These are decent businesses in isolation, but can Intuit find ways to make them more valuable by being together in the same group? Or are they simply paying lip service to synergies and AI enhancements?
Microsoft is the OG when it comes to enterprise computing. As mature as the business is, there are still plenty of growth drivers – especially when it comes to AI, with Microsoft at the forefront of this trend across offerings like OpenAI and Copilot. Even Bing is somehow managing to increase in popularity thanks to AI! Behind all this excitement lies an important reality: the data centre investment cycle is very different to the software-as-a-service predictability that Microsoft investors are accustomed to. Will this impact the valuation over time?
Uber is a verb – but not quite everywhere just yet. There’s a substantial growth runway ahead, both in terms of existing market penetration and new opportunities for products and markets. This creates a strong growth case for Uber, but how much of that is already priced in?
Nvidia has been a headline grabber of note in global markets, with eyewatering returns that have left even the other semiconductor stocks for dead. Mohammed Nalla focused on not just the latest results from Nvidia, but the performance of other stocks in the sector. The Finance Ghost tackled Intuit, covering the growth in revenue across the product range and the importance of integration strategies within the ecosystem. Although this is a powerful SaaS business, the risk of a double top in the share price chart cannot be ignored.
Amazon’s management talks about it being early days in all of their businesses. That’s quite a statement for one of the world’s most valuable and exciting companies to make. Is this just a classic case of a growth stock trying to support its valuation multiple, or does Amazon still have enough runway? With performance well ahead of the Nasdaq-100 this year, Amazon has caught up some of the lost ground. Can it keep going?
It took Google 15 years to reach $100 billion in annual review. It then took just 6 years to triple it to $300 billion. But perhaps the most impressive statistic of all is that the company expects to end the 2024 financial year with an annualised run rate of $100 billion revenue in YouTube and Cloud combined, let alone Search. With growth of around 55% in the share price in the past 12 months, Alphabet has even outperformed Microsoft over that period. Perhaps Alphabet really is the old dog that can learn new tricks.
In the final Magic Markets episode for 2023, hosts Mohammed Nalla and The Finance Ghost covered two global technology companies that sit adjacent to some of the more talked about names. Moe covered Oracle, giving an overview of the business and also looked at Oracle’s latest financial performance and the disappointing guidance given to the market. This leads into a discussion on why the share price has underperformed tech peers. Ghost covered Adobe, starting with the exceptional share price volatility and also covers the desire for acquisitions as well as the recently failed deal with Figma.
The only thing that is green about Aston Martin is the colour on the Formula One cars that are giving the brand a major boost at the moment. Share price action this year has been highly speculative, with tough financial results and a balance sheet that looks set to need more equity capital.
Spotify has 500 million monthly active users, yet the business model economics are far from proven. It doesn't help to grow users without any regard for profitability, or all that is happening is that the losses are getting bigger! In our research, we delve into both the strategic drivers and the key trends in ARPU and gross margin to arrive at our conclusion. Spoiler alert: we are bearish.
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