Corporate insiders are selling far more of their shares than buying.
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Fool.com contributor Parkev Tatevosian forecasts where Alibaba‘s (NYSE: BABA) stock could be by the end of the year.
*Stock prices used were the afternoon prices of April 10, 2024. The video was published on April 12, 2024.
Should you invest $1,000 in Alibaba Group right now?
Before you buy stock in Alibaba Group, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alibaba Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $555,209!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
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Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.
Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
My Alibaba Stock Price Prediction for 2024 was originally published by The Motley Fool
Customers admire a Tesla Model 3 electric vehicle at a Tesla store in Honolulu, Hawaii.
Alex Tai | SOPA Images | Lightrocket | Getty Images
U.S. consumers have been making the move to all-electric vehicles more slowly than many expected — but a growing leader in EV adoption is Hawaii.
The tropical island state this year ranks fifth in overall EV adoption at 11.9% of new retail vehicles sold through February, according to J.D. Power.
Hawaii also ranks third – behind only California (46.1) and Washington (37) – in J.D. Power’s “EV Adoption Score,” which is weighted based on market, consumer preference and EV availability, among other conditions, with a score of 33.8.
“We measure adoption relative to availability, meaning shoppers need availability of EVs that meet their needs … before they can even consider adopting,” said Elizabeth Krear, vice president of the electric vehicle practice at J.D. Power. “In California, the quantity of EVs is much higher than in Hawaii. But when consumers are given a viable option, 33% are choosing to buy the EV.”
Hawaii also is the top state for EV adoption that hasn’t agreed to the California Air Resources Board’s Zero-Emission Vehicle program, according to J.D. Power. Those rules promote EVs and include stricter vehicle emissions and miles per gallon standards for traditional vehicles in places that have adopted the measure, including the other top five states: California, Washington, Oregon and Colorado.
Why Hawaii?
What’s going on in Hawaii that’s leading to more consumers opting for EVs? It’s a mix of things but mainly high fuel costs, the availability of renewable energy for charging and culture, according to Ivan Drury, director of insights at auto research firm Edmunds, who lives in Waikiki on Hawaii’s Oahu Island.
“There is a higher sense of responsibility towards stewarding the land versus most mainland states. If you look up ‘Aina’ in Hawaiian, you see what I mean, lots of pride for the land,” he said.
Drury also said the popularity of hybrid models in the state (at 19% in 2023) has helped in the switch to EVs, and road trip concerns – a hurdle for some buyers in the U.S. – aren’t really a problem in Hawaii.
“We’re on an island. No one is really worried about road trips unless they live on the Big Island,” he said. (For reference, the “Hawaii Belt” around the Big Island, or Hawaii Island, is only about 260 miles.)
Gasoline prices also play a factor, as they do in other states, such as California. The average price for a gallon of gas in Hawaii is about $4.72, according to AAA. That’s the highest in the U.S. other than California and $1.10 higher than the national average of $3.62 a gallon.
J.D. Power reports the top-selling EVs in the state are the Tesla Model Y, Tesla Model 3 and Ford F-150 Lightning.
“I’m really happy. I like the car. I like not buying gas,” said Scott Sageman, a 2021 Tesla Model 3 owner who has lived on Hawaii’s Big Island since moving from California in 2020.
Aloha Kia Leeward in Waipahu, Hawaii
Aloha Kia
Russell Wong, regional vice president of Aloha Kia’s seven stores in Hawaii, said customer interest in EVs continues to grow but the vehicles still remain only about 2% of the stores’ sales.
“While it is a significant percentage of our current sales compared to other dealers or other markets, it’s still a very, very small percentage,” he said. “We do see that continuing to climb.”
Wong said there’s been a lot of interest in Kia’s new EV9 SUV that’s just arriving to dealerships. The current top-selling EV at the Kia dealerships is the Niro, which also is Kia’s least expensive all-electric vehicle, and Aloha Kia has priced it starting at about $36,000.
EV concerns
Although Hawaii is embracing electric vehicles more than some of its peers, it still has many of the same problems with EV adoption that the U.S. mainland does, including lack of charging infrastructure, affordability and a dearth of vehicle choices.
A Gallup poll released Monday found less than half of U.S. adults, 44%, say they are either “seriously considering or might consider” buying an EV, which is down from 55% in 2023. The proportion not intending to buy an EV has increased from 41% to 48%.
Sageman, who lives on the slope of a volcano, said he has not experienced problems charging, as he does so at home, but the estimated range of his Model 3 can be less than expected due to the state’s hilly terrain.
“The one thing that I’ve noticed is you do not pay too much attention to the estimated range,” he said. “You’re not going to get the same amount if you’re doing a lot of uphill driving.”
The average cost to a consumer buying an EV from a franchised dealer (excluding Tesla, Rivian and other direst-to-consumer brands) in Hawaii this year is more than $62,600, according to Edmunds. That’s down from more than $68,500 last year and roughly $12,700 over the average price of a vehicle in Hawaii.
High prices are a national and Hawaiian trend. Upper-income Americans across the country are the subgroup most likely to own an EV, with 14% doing so, up from 6% last year, according to the Gallup report.
“We’re sort of at the extreme ends of adoption,” Drury said. “For those in a position to take advantage of an EV, it works, sold. For those that it doesn’t, it won’t, for a very long time. Overcoming the obstacles of infrastructure and high costs of living aren’t something that can be taken care of overnight or even within a few years.”
We’re officially in a new bull market. And these two stocks could be big winners.
We’ve officially entered a new bull market, and the major stock indices are at or near their all-time highs. There are some excellent businesses that could thrive in a bull market environment, especially if interest rates start to fall. In this video, you’ll hear two of our contributors’ top picks.
*Stock prices used were the afternoon prices of April 8, 2024. The video was published on April 9, 2024.
Matt Frankel has positions in Shopify. Tyler Crowe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.
Matthew Frankel is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The U.S. government is considering laws to help society adapt to the introduction of artificial intelligence.
Early users of the technology are already seeing labor productivity gains. For example, Klarna, a buy now, pay later financial services provider, estimates that its AI assistant tool will increase its profit outcome by $40 million by the end of 2024.
“It basically does the job of 700 full-time agents,” Klarna CEO Sebastian Siemiatkowski said in an interview with CNBC. “It basically was capable of taking care of two-thirds of all the incoming errands that we have over chat.”
Klarna’s AI assistant tool is built on OpenAI’s systems, which power both ChatGPT and Sora — two products that have captured the attention of both the general public and Congress.
In 2023, members of Congress convened panels, private dinners, and learning sessions with high-profile tech executives including Sam Altman, CEO at OpenAI. The White House followed up by seeking commitment from 15 private industry leaders to help lawmakers understand the best way to identify risks and make use of the new technologies. The list includes some of the biggest players in the tech sector, alongside newcomers such as Anthropic and OpenAI.
The Senate Task Force on AI, established in 2019, has passed at least 15 bills into law that focus on research and risk assessment. But when compared with measures passed by the European Union in 2024, the U.S. regulatory environment appears to be relatively relaxed.
“The folks in Brussels, they come up with a lot of bureaucratic rules that make it harder for companies to innovate,” Erik Brynjolfsson, a senior fellow at Stanford Institute for Human-Centered AI, said in an interview with CNBC. “The entrepreneurial environment isn’t there the way it is in the United States.”
Economists have worried for years that artificial intelligence could sink job prospects for white-collar workers, similar to the effects globalization has had on blue-collar workers in the past. A study from the International Monetary Fund suggests that at least 60% of work in advanced economies would be exposed to changes that stem from the wide adoption of artificial intelligence.
In 2023, lawmakers in the New York State Assembly put forward a measure to limit the expected impact of tech-driven layoffs with robot taxes. The idea is to introduce a cost for companies that use technology to displace workers within the state. As of April 2024, the bill remains in committee with an uncertain future.
Many economists have said that robot taxes, if used at all, should be set at a relatively low level. In the U.S. both employers and employees face payroll taxes of 7.65% of income. But the optimal rate for a robot tax would be between 1% and 3.7%, according to researchers at the Massachusetts Institute of Technology.
“It’s good for us to have output and productivity. And so I’m not sure we want to tax those,” said Brynjolfsson. “Robots are part of what boost technological growth and give us that higher productivity.”
“There will be a time in the future where robots can do most of what humans currently do,” Brynjolfsson said. “We’re not there yet.”
Watch the video above to learn more about the U.S. government’s plan to regulate artificial intelligence.
Great investing minds appear to be thinking alike about two top AI stocks.
It’s no secret that artificial intelligence (AI) is the hottest game in town for investors. Much of the big gains for the stock market in 2023 and 2024 have been driven by surging interest in everything AI.
No company has been more at the forefront of the AI boom than Nvidia (NVDA -2.68%). The chipmaker’s share price skyrocketed 239% last year and is up close to 75% this year. But is the enthusiasm about Nvidia beginning to fade? Maybe so. Two billionaire investors are selling Nvidia and buying another AI stock instead.
Thumbs down to Nvidia
David Tepper is known to many as the owner of the Carolina Panthers. However, he amassed enough money to buy the NFL franchise by achieving tremendous success with the hedge fund he founded in 1993, Appaloosa Management. Today, Tepper’s net worth stands at $20.6 billion.
Tepper is bullish about AI. Eight of the top 10 holdings in Appaloosa’s portfolio are AI stocks. Nvidia ranks as the hedge fund’s fourth-largest position, but Tepper seems to think the stock’s tremendous momentum could be near an end. In the fourth quarter of 2023, he sold almost 23% of Appaloosa’s stake in the graphics processing unit (GPU) maker.
He isn’t the only billionaire investor now noticeably less excited about Nvidia. Chase Coleman first made his mark in the investment world by working with legendary hedge fund manager Julian Robertson. Coleman next ran his own hedge fund, Tiger Global Management, which later expanded into venture capital. He’s now worth $5.7 billion.
Tiger Global Management reduced its position in Nvidia in Q4 by nearly 13%. Nvidia still claims the No. 10 spot in the hedge fund’s portfolio with a stake valued at roughly $480 million at the end of 2023. However, Coleman is taking some of his profits off the table with the stock after making big gains.
Thumbs up to Amazon
Both Tepper and Coleman saw Amazon (AMZN -1.54%) as a better AI stock to buy in Q4. Tepper’s Appaloosa fund increased its position in the e-commerce and cloud-services giant by more than 5%. Coleman’s Tiger Global Management upped its stake in Amazon by 24%.
Why are these two billionaire investors more bullish about Amazon than Nvidia? I suspect Tepper and Coleman might think Nvidia’s valuation is now at a level where any sign of trouble could cause a steep sell-off. At the same time, Amazon appears to be building sustainable momentum.
AI is definitely a key growth driver for Amazon. The company’s cloud platform, Amazon Web Services (AWS), is the top cloud-services provider based on market share. AWS is especially investing heavily in supporting generative AI development.
Amazon is using generative AI internally as well. CEO Andy Jassy said in the company’s Q4 earnings conference call, “[W]e believe it [generative AI] will ultimately drive tens of billions of dollars of revenue for Amazon over the next several years.”
Of course, Amazon isn’t just an AI stock. The company’s efforts to increase profitability in its e-commerce business continue to pay off. Amazon has delivered seven consecutive quarters of improving operating margins in its North America business segment.
It has also become a key player in the digital-advertising market. Amazon’s advertising revenue soared 26% year over year in Q4. And that growth came before the company launched its ads on Prime Video.
Buying more shares of Amazon has already paid off for Tepper and Coleman. The stock is up over 20% year to date.
Should you buy Amazon too?
Investors shouldn’t sell Nvidia and buy Amazon only because two hedge fund billionaires have. However, it’s not a bad idea to examine the potential reasons behind Tepper and Coleman’s moves.
I think the reasons Tepper and Coleman added more shares of Amazon in Q4 are still applicable now. The company’s profits will likely continue to rise. AI and advertising remain strong growth drivers. Amazon is still an excellent long-term pick, in my view.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keith Speights has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool has a disclosure policy.
A million dollars is a big amount, but if you have decades to go before retirement, it is within reach for most investors. The key is finding an investment approach and sticking to it through good markets and bad ones.
Three stocks currently out of favor (two that pay dividends and one that doesn’t) to consider buying and holding and help you attain that $1 million investment goal are Toronto-Dominion Bank (NYSE: TD), landlord Realty Income (NYSE: O), and Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B). Here’s a quick look at each.
1. Toronto-Dominion Bank: Real concerns but overblown risk
Toronto-Dominion Bank, or TD Bank as it is more commonly known, is one of the largest banks in Canada. That country’s banking regulations are very strict, which has resulted in a small number of big banks (like TD Bank) that are effectively protected from new competition. This heavy-handed regulation has also created a conservative ethos within TD Bank and its peers. So, all in, it is a fairly safe bank.
That said, the housing market in Canada has been in a worrying state. First, there was a long rise in home prices, and now the quick rise in interest rates has investors worried that loan defaults will start ticking higher.
TD Bank has an added worry. It was recently forced by U.S. regulators to cancel an acquisition because of concerns over the company’s money-laundering controls. Canada is the bank’s foundation, and its U.S. business was expected to be its growth engine. That engine has just stalled, but it is likely only temporary.
As a result of these concerns, investors have pushed the bank’s dividend yield up to 5%, which is toward its high end historically. Given that the bank has paid a dividend for over 100 years and has North America’s third-highest tier 1 capital ratio, a measure of its ability to weather adversity, the risk here seems modest.
The growth opportunity in the U.S. market, meanwhile, is still quite large even if it takes longer to tap into. Wall Street’s concerns seem like a buying opportunity.
2. Realty Income isn’t exciting, but that’s the point
Realty Income’s 5.8% dividend yield is near its highest levels over the past decade. The investment-grade real estate investment trust (REIT) has increased its payout annually for 29 consecutive years.
That said, this is a slow and steady REIT, not a fast-growing one. But that makes it a good foundational investment on which to layer faster-growing dividend payers like TD Bank and non-payers like Berkshire Hathaway.
What’s perhaps most compelling about Realty Income is its size, given that its $45 billion market cap is roughly three times larger than its next-closest peer among net lease REITs (net leases require tenants to pay most property-level operating costs).
Yes, rising interest rates have been a business headwind, but Realty Income has advantageous access to capital markets thanks to its scale and financial strength. That gives it the capacity to do deals that peers can’t. It is also large enough to be an industry consolidator, having bought two net-lease peers in recent years.
If you reinvest dividends with this slow-growing, high-yield stock, it can provide a solid foundation (if a boring one) for a more diversified portfolio.
3. Berkshire Hathaway is an odd beast
Speaking of giant companies, conglomerate Berkshire Hathaway has its fingers in a vast array of businesses. It owns many, including a large insurance business, a railroad, and energy operations, and it invests in individual stocks, like Coca-Cola and Occidental Petroleum.
But it is probably best known for its CEO, Warren Buffett, whose ethos pervades the company and all of its investments.
What’s interesting here is the success it has achieved over time, focusing on using the huge amount of cash its business generates to invest in other assets. Today Berkshire has a cash hoard of almost $34 billion and short-term investments of nearly $130 billion. All of that available cash is waiting to be deployed into new businesses when the time is right, since Buffett and Berkshire tend to favor investing in a contrarian fashion.
The story at Berkshire has been to buy low and hold on as long as possible. That has worked exceptionally well over the long term even if it has resulted in weak performance over shorter periods of time. Which is why Berkshire Hathaway is the kind of stock that you want to own for decades.
As for the right time to buy, it currently seems reasonably valued with a price-to-earnings ratio and price-to-sales ratio that are both near or below their five-year averages. A fair price is a good one for a company like Berkshire Hathaway.
A balanced mix of assets
Although any one of these stocks is worthwhile, TD Bank, Realty Income, and Berkshire Hathaway together create an interesting mix: a stock for income and growth, another for income alone, and a third for just growth that creates a diverse and balanced portfolio. The key, however, is to buy and hold for a very long time, letting the businesses you own continue growing. That’s what will build your seven-figure nest egg.
Should you invest $1,000 in Berkshire Hathaway right now?
Before you buy stock in Berkshire Hathaway, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of April 8, 2024
Reuben Gregg Brewer has positions in Realty Income and Toronto-Dominion Bank. The Motley Fool has positions in and recommends Berkshire Hathaway and Realty Income. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.
Want $1 Million in Retirement? 3 Stocks to Buy Now and Hold for Decades. was originally published by The Motley Fool
Drivers charge their Teslas in Fountain Valley, CA, on Wednesday, March 20, 2024.
Jeff Gritchen | Medianews Group | Getty Images
Tesla said on Friday that it’s cutting the subscription price of its premium driver assistance system for customers in the U.S.
Marketed as its Full Self-Driving, or FSD, package, Tesla customers will now pay $99 per month, down from $199 previously.
The price cut is at odds with previous promises from CEO Elon Musk, who has repeatedly said that the cost of FSD would only go up as Tesla adds features and functionality to the system.
“The FSD price will continue to rise as the software gets closer to full self-driving capability with regulatory approval,” Musk wrote on Twitter, now known as X, on May 18, 2020. He said at that point “the value of FSD is probably somewhere in excess of $100,000” per car.
Despite its brand name, the company’s FSD option today doesn’t make Tesla vehicles autonomous or functional as robotaxis.
Musk has promised shareholders and customers a robotaxi for years, and has said their existing vehicles would soon become self driving after an over-the-air software update.
He told investors on a call in 2019 that autonomous driving would transform Tesla into a company with a $500 billion market cap, up from around $42 billion at that time. (The company is worth over $500 billion today even without having developed an autonomous car.) Tesla raised over $2 billion through debt and equity after the call.
In a notice that’s now shown to some drivers through the touchscreen displays in their cars, Tesla says:
“Full Self-Driving (Supervised) can drive your Tesla almost anywhere. It will make lane changes, select forks to follow your navigation route, navigate around other vehicles and objects, and make left and right turns. It must be used with additional caution and an attentive driver. It does not make your vehicle autonomous. Do not become complacent.”
The company uses sensors in the steering wheel and cabin cameras, positioned above the rearview mirror, to determine if a driver is attentive or not, and will audibly alert drivers to keep their eyes on the road or hands on the wheel.
In 2022, the California Department of Motor Vehicles formally accused Tesla of engaging in deceptive practices around the marketing of its driver assistance systems, including its standard package Autopilot and FSD in the U.S., according to filings with a state administrative agency.
Meanwhile, Alphabet-owned Waymo is now operating commercial robotaxi services in several U.S. cities. The company also recently struck a partnership with Uber Eats for driverless food delivery. In China, Didi’s autonomous unit operates commercially in markets including Guangzhou. Companies including Bill Gates-backed Wayve in the U.K. and Amazon’s Zoox in the U.S. are testing robotaxis as well.
In a push for end-of-quarter sales last month, Musk mandated that all sales and service staff install and demo FSD for customers before handing over the keys. He wrote in an email to employees, “Almost no one actually realizes how well (supervised) FSD actually works. I know this will slow down the delivery process, but it is nonetheless a hard requirement.”
After that, Tesla also announced it would give away a one-month free trial of FSD to all customers in North America. Owners’ responses to the latest version of FSD have been mixed with some fans impressed, and many safety-conscious drivers switching off the free FSD trial, viewing it as inconsistent and unsafe.
Musk also recently promised to “unveil” a new dedicated robotaxi on Aug. 8. Tesla unveilings are marketing events, and don’t indicate a date for the start of production and deliveries. For example, Tesla unveiled a new version of the Roadster, and a fully electric heavy-duty truck called the Semi in 2017 and didn’t begin Semi deliveries until December 2022. It still hasn’t produced the new version of the Roadster.
Tesla didn’t respond to a request for more information, including whether the price cut announced Friday is permanent or temporary.
WATCH: Musk is trying to highlight the value that robotaxis could bring
The stock caught a big downgrade on an unexpected competitive threat from Nvidia.
Shares of data center switch juggernaut Arista Networks (ANET -8.55%) plunged on Friday, down about 8.6% as of 2:20 p.m. ET.
While the entire tech sector and frankly the entire market was down today, Arista was doubly affected by an analyst downgrade. The content of the downgrade was especially worrying, given that Arista may find itself with a tough brand-new competitor: Nvidia.
Nvidia is getting into Ethernet switches
Analyst Mike Genovese of Rosenblatt Securities made the big downgrade today, lowering his price target on Arista from $330 to just $210. That’s a big move with the stock around $270 today, essentially flipping from a buy to a sell.
A double downgrade is somewhat rare on Wall Street, and implies a big reassessment of a company’s outlook. In this case, Genovese notes that Arista’s outlook for $750 million in 2025 artificial intelligence (AI)-related switch sales is at risk from a brand new competitor: Nvidia.
Arista investors may not have contemplated Nvidia as a competitor, as Nvidia is known for its market-leading GPU chips for artificial intelligence. However, with the acquisition of Mellanox in 2019, Nvidia also acquired key AI Infiniband networking technology.
Infiniband competes with the more industry-standard Ethernet networking technology. While Infiniband has been the best solution for AI networking in recent years, it is largely expected that Ethernet will develop into a more competitive AI networking technology, perhaps becoming the preferred solution in the near future. Arista, as a leader in ethernet switching, is supposed to benefit from that transition.
However, Genovese noted that Nvidia is now developing its own ethernet switch solution in response. And given that Nvidia can package its networking solutions with its highly in-demand chips, Genovese expects Nvidia to gain an outsized share of the AI ethernet market, hurting Arista.
A big concern for an expensive stock
Arista has shown itself to be an excellently run company that has disrupted the data center switching market in the early part of the cloud computing era. But that’s also why the company now trades at a P/E ratio of 41, even after today’s decline.
That doesn’t leave much margin for error if an unexpected headwind emerges. It appears as though Nvidia’s rise is presenting such a challenge to Arista’s AI revenue and stock price today.
Billy Duberstein has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Arista Networks and Nvidia. The Motley Fool has a disclosure policy.
U.S. small-cap stocks are “challenged” as Wall Street pushes out expectations for when the Federal Reserve may begin lowering interest rates due to concerns over persistent inflation, according to BofA Global Research.
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