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Nike And Facebook Among The Top 5 Trending Stocks For May

The last week has been an exciting one. GM released their Q1 earnings report, Dogecoin and other meme stocks are once again rallying, and Q.ai is now releasing their trending stock report with insights from the Forbes AI Investor platform, such as this one:

Let’s get into it.

Q.ai runs daily factor models to get the most up-to-date reading on stocks and ETFs. Our deep-learning algorithms use Artificial Intelligence (AI) technology to provide an in-depth, intelligence-based look at a company – so you don’t have to do the digging yourself.

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Nike, Inc (NKE)

First up in our trending stocks report is Nike
NKE
, which closed down 1.11% on Tuesday to $131.55 with a final volume of 6.12 million trades. While Nike started 2021 strong – and has had a banner year in light of the pandemic – the company is now swinging between slipping and stagnating, with the 22-day price average sitting at $132.83. Overall, the stock is down 5.9% for the year.

Throughout the pandemic, Nike has moved opposite many big clothing retailers. Increasing demand for fitness apparel due to a shift in consumer trends (and work schedules) meant that Nike boomed not only in company performance, but stock prices as well – heights from which Nike is now slowly slipping.

Still, in light of the pandemic, Nike reported decent numbers over the past 12 months. To start, their revenue grew by almost 3% in the last year and 5.8% in the last three, from $36.4 billion to over $37.4 billion. The company is projecting forward 12-month revenue growth of over 10%.

And in the last year alone, their operating income soared almost 41% to $3.1 billion (though it’s shrunk from its three-year $4.45 billion mark).

This increase in profits held good news for shareholders too, as EPS soared 33.7% to $1.60 in the last fiscal year – which is up almost 83% over the last three. At the same time, Nike reported an ROE of 29.7%, up from 17.4% three years ago. Currently, Nike is trading with a forward 12-month P/E of 36.76.

According to our AI, Nike’s performance puts them squarely in the “average” range, with C’s across the board in Technicals, Growth, Low Volatility Momentum, and Quality Value. While there’s some room for expansion and they’re middling the road on volatility, they’re also not high in value for the long-term investor – which has earned this trending stock an AI rating of Neutral for the month of May.

Facebook, Inc (FB)

Facebook closed down 1.31% on Tuesday to $318.36 per share, ending the day with just over 24 million trades. The company is up almost 18.4% YTD thus far, with prices steadily increasing month over month as reflected by the 22-day price average of $309.32.

As the fifth largest publicly traded company in the U.S., Facebook has come a long way in ten years – up almost tenfold from its IPO price of $38. Despite recurring privacy and misinformation concerns, Facebook has experienced massive growth (up to 2.85 billion monthly users), enormous advertising revenues ($25.4 billion last quarter alone), and exponential revenues (48% on its top line).

While Facebook’s price may seem overvalued initially, traditional measures show that Facebook is actually well within reasonable limits – and in some cases, below its peers. And as a long-term, stable laeader in the tech space, Facebook’s massive user base (read: marketing potential) and fair valuation make it a fan favorite among Wall Street giants.

In addition to impressive first quarter revenues, Facebook had a solid 2020, as well. Revenue grew by 9.8% in the last fiscal year – though that’s paltry beans compared to 69% growth in the last three – bringing the company to $85.965 billion. Facebook’s EPS inflated right along with it, up 15.7% to $10.09 in the last fiscal year. And while this growth is huge, the company projects it has room to grow by at least 3.7% in the next twelve months.

At the same time, operating income increased by 16.8% to $32.67 billion, while ROE stayed steady at 25.4%. Currently, the company is trading with a forward 12-month P/E of 24.14.

Thanks to these impressive numbers, Facebook rates well with our AI, as well: A in Growth, B in Low Volatility Momentum and Quality Value, and C in Technicals. On the whole, this trending stock has earned its Attractive rating for the month of May.

­­­Activision Blizzard, Inc (ATVI)

Activision Blizzard, Inc
ATVI
closed at $88.69 on Tuesday, down 2.7% for the day and 0.87% for the year. The company sparked high interest – marked by a trade volume of 15.2 million – as its stock prices have continued steadily slipping in the last three weeks, as evidenced by 10- and 22-day price averages of $92.01 and $94.35, respectively.

However, Activision prices may be set to leap again, as the popular videogame publisher just announced that they’d topped their first-quarter estimates alongside their full-year guidance. Call of Duty topped the charts at over 150 million active monthly players, with King – Activision’s mobile division – slotting in 258 million monthly users. The company also reiterated a sure-to-be-popular plan to hire more than 2,000 developers, along with a host of franchise employees, to bolster activity in the next 12 months.

The company has other good news to celebrate, too – namely, solid 2020 fiscal performance as a result of stay-at-home orders and increased leisure time. Revenue grew by over 6% to $8.1 billion, topping the $7.5 billion earned three years ago. EPS grew, too, up almost 5% to $2.82.

Operating income grew similarly at 6.7% this year, with a 51% increase in the last three seeing numbers rise from nearly $2 billion to $2.83 billion. At the same time, the company’s ROE has shrunk only slightly, down from 17.7% to 15.8%. Currently, Activision boasts a forward 12-month P/E of 24.38.

According to our AI, solid performance and the drive for company growth have earned Activision just above average grades, with a B in Quality Value and C’s in Technicals, Growth, and Low Volatility Momentum. Q.ai rates Activision Blizzard, Inc as Attractive for the month of May.

Morgan Stanley (MS)

Morgan Stanley
MS
closed at $82.64 on Tuesday, inching up 0.22% for the day and bringing YTD gains to 22.07%. While the company’s progress has been slow since it fell in mid-March, it’s slowly but surely gaining, as is made evident by the 22-day price average of $80.19.

As a multinational investment bank and financial services company that services 42 countries, Morgan Stanley has had a busy year. In its recent Q1 earnings report, the company noted net revenues of $15.7 billion, up 47% YOY, with investment banking revenues alone up 128% YOY.

The company’s annual numbers don’t look too shabby, either. For instance, revenue is up 12.3% in the last fiscal year and almost 35% in the last three, jumping from $40 billion to nearly $48.2 billion. Increased profits have also spearheaded 61.6% gains in EPS as well, from $4.73 three years ago to $6.46 in the last fiscal year.

At the same time, Morgan Stanley’s operating income has soared 55% in the last three years, from $13.7 billion to $17.9 billion. ROE has also crept up from 11% to 12%.

However, all this recent growth hasn’t left much room for future increases, as the company is currently trading with a forward 12-month P/E of 12.91.

Still, Q.ai’s AI sees promise in Morgan Stanley’s future, and has graded the investment firm above-average with an A in Growth, B in Low Volatility Momentum, and C’s in Quality Value and Technicals. To date, Morgan Stanley is rated Attractive for the month of May.

Intel Corp (INTC)

Intel Corp
INTC
 
closed down 0.63% on Tuesday to $56.90 per share, ending the day with well over 35 million trades. The American chipmaker has continued its yearlong performance of alternating gains and slides since 2021 began – though the last month has seen steady (and stark) declines, with the 22-day average falling at $62.47. Despite this, Intel is still up over 15% for the year.

Intel is one of the great chipmakers of the world – but years of manufacturing issues have long dogged their performance, with no end in sight. As the age of chipmakers making their own chips fades into the distance, companies like AMD have pulled ahead as they outsource to overseas production foundries. Intel also has to reckon with the fact that not only has their foundry floundered, but so has their production team; while TSMC and Samsung are already pushing out 5nm chips, Intel doesn’t plan to release their first 7nm chips until 2023.

This puts them two nanometers – and several years – behind the competition, with a global semiconductor shortage and clamoring demand to contend with for the foreseeable future.

Still, not all is lost for Intel; after all, they’re still a popular choice for many tech manufacturers, with solid long-term performance to back them up.

2020 saw Intel pull in nearly $77.9 billion in revenue, an increase of 9.7% over the last three years, while operating income matched three-year performance at almost $23.9 billion. Their EPS has grown in the last three years, too, from $4.48 to $4.94.

However, the company doesn’t project much room for growth in the coming twelve months, with their P/E ratio sitting at 13.26. And our AI agrees that Intel is a mixed bag – the company earned C’s in Low Volatility Momentum and Quality Value, with a D in Growth and an F in Technicals.

While we can’t entirely condemn Intel, we can’t praise it, either – shuffling Intel Corp to Neutral for the month of May.

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