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Microsoft’s Big Moves This Quarter | From Activision to AI AgentMicrosoft’s Revenue Surge: The Power of AI, Gaming, and Strategic Investments Microsoft has released its Q1 FY25 earnings for the quarter ending in September The stock saw a 6% drop, indicating the results fell short of investors' high hopes. Trading at over 30 times projected earnings for next year, expectations for Microsoft were significant. CEO Satya Nadella stated “Our AI business is set to exceed an annual revenue run rate of $10 billion next quarter, making it the fastest business in our history to reach this milestone.” This means that AI will soon account for about 4% of Microsoft's total revenue in under three years a remarkable feat for a global giant. If you need a quick summary, here are three main points: 1. ☁️ Azure’s growth is slowing. As Microsoft’s key player in the AI competition, Azure grew 34%, down slightly from 35% in the prior quarter (after adjustments). This comes as Google Cloud raised the bar, with its growth accelerating from 29% to 35% during the same period. 2. 🤖 AI growth is limited by hardware supply, as capacity struggles to meet demand. Data center expansion is a long-term process, and Microsoft is investing heavily in infrastructure, aiming for a growth boost by 2025. 3. 👨‍👩‍👧‍👦 Consumer-focused products like Gaming and Devices are underperforming. Although not essential to Microsoft's core business, their poor performance has impacted overall results. Here’s a breakdown of the insights from the quarter. Overview of today’s insights: - New segmentation. - Microsoft’s Q1 FY25 overview. - Key earnings call highlights. - Future areas to monitor. 1. New Segmentation Revised Business Segments In August, Microsoft announced a reorganization of its business segments, effective this quarter. The purpose? To better align financial reporting with the current business structure and strategic management. Summary of the main changes - Microsoft 365 Commercial revenue consolidation: All M365 commercial revenue, including mobility and security services, now falls under the Productivity and Business Processes segment. -Copilot Pro revenue shift: Revenue from the Copilot Pro tool was moved from Productivity and Business Processes to the More Personal Computing segment under Search and news advertising. -Nuance Enterprise reallocation: Revenue from Nuance, previously part of Intelligent Cloud, is now included in Productivity and Business Processes. -Windows and Devices reporting combination: Microsoft now reports Windows and Devices revenue together. Impact of These Changes: Core Segments Overview: In summary: - The Productivity and Business Processes segment has grown significantly. - The Intelligent Cloud segment has decreased due to the reallocation of Nuance and other revenue. Products and Services Overview: - M365 Commercial now includes Nuance, shifted from the Server products category, along with integrated mobility and security services. - Windows & Devices have been merged into a single, slower-growth category. Additional Insights: - Azure, Microsoft's cloud platform, is reported within 'Server products and cloud services.' Although its growth rate is shared by management, exact revenue figures remain undisclosed. Azure’s past growth figures have been adjusted for consistency, with the last quarter’s constant currency growth recast from 30% to 35%, setting a higher benchmark. Tracking these metrics is challenging due to limited revenue disclosure, but this recast indicates Azure's raised growth expectations. 2. Microsoft’s Q1 FY25 Performance Financial Summary: -Revenue: Up 16% year-over-year, reaching $65.6 billion (exceeding estimates by $1 billion). Post-Activision Blizzard acquisition in October 2023, the growth was 13% excluding the merger. New Product and Services Segmentation Results - Server products & cloud services: $22.2 billion (+23% Y/Y). - M365 Commercial: $20.4 billion (+13% Y/Y). - Gaming: $5.6 billion (+43% Y/Y), influenced by Activision. - Windows & Devices: $4.3 billion (flat Y/Y). - LinkedIn: $4.3 billion (+10% Y/Y). - Search & news advertising: $3.2 billion (+7% Y/Y). - Enterprise & partner services: $1.9 billion (flat Y/Y). - Dynamics: $1.8 billion (+14% Y/Y). - M365 Consumer products: $1.7 billion (+5% Y/Y). Core Business Segments Breakdown: - Productivity and Business Processes: Increased 12% Y/Y to $28.3 billion, supported by M365 Commercial, especially Copilot adoption. - Intelligent Cloud: Grew 20% Y/Y to $24.1 billion, with Azure AI driving growth. - More Personal Computing: Grew 17% Y/Y to $13.2 billion, including a 15-point boost from Activision. Devices fell, but search and ad performance improved under new segmentation. Key Observations: - Microsoft Cloud revenue climbed 22% Y/Y to $39 billion, making up 59% of total revenue (+3 percentage points Y/Y). - Azure continues to drive cloud services and server products' growth. - Xbox growth has surged due to the Activision acquisition since Q2 FY24, expected to stabilize by Q2 FY25. - Windows OEM and devices combined, showing a 2% decline in Q1 FY25. - Office rebranded to Microsoft 365; updated naming will be used starting next quarter. - Margins: Gross margin at 69% (down 2pp Y/Y, 1pp Q/Q); operating margin at 47% (down 1pp Y/Y, up 4pp Q/Q). - EPS: Increased 10% to $3.30, beating by $0.19. Cash Flow and Balance Sheet: - Operating cash flow: $34 billion (52% margin, down 2pp Y/Y). - Cash**: $78 billion; Long-term debt**: $43 billion. Q2 FY25 Outlook: - Productivity and Business Processes: Anticipated 10%-11% Y/Y growth, steady due to M365, Copilot inclusion, and expected LinkedIn growth of ~10%. Dynamics set to grow mid-to-high teens. - Intelligent Cloud: Projected 18%-20% Y/Y growth, slightly slowing, with Azure growth expected between 28%-29%. - More Personal Computing: Forecasted ~$14 billion revenue, declines in Windows, Devices, and Gaming anticipated, with some offset from Copilot Pro. Main Takeaways: - Azure's growth slowed to 34% Y/Y in constant currency, with AI services contributing 12pp, up from 11pp last quarter. This marks a dip from the recast 35% prior and included an accounting boost. - Capacity limitations in AI persist; more infrastructure investments are planned, with reacceleration expected in H2 FY25. - Commercial performance obligations grew 21% to $259 billion, up from 20% in Q4. - Margins were pressured by AI infrastructure investments; Activision reduced the operating margin by 2 points. - Capital expenditures increased by 50% to $15 billion, half dedicated to infrastructure, with further Capex growth expected. - Shareholder returns included $9.0 billion through buybacks and dividends, matching Q4 repurchases. Earnings Call Highlights: Azure AI saw a doubling of usage over six months, positioning it as a foundation for services like Cosmos DB and SQL DB. Microsoft Fabric adoption grew 14% sequentially, signaling rapid uptake. AI Expansion: GitHub Copilot enterprise use surged 55% Q/Q, with AI-powered capabilities used by nearly 600,000 organizations, a 4x increase Y/Y. M365 Copilot has achieved a 70% adoption rate among Fortune 500 companies and continues to grow rapidly. LinkedIn saw accelerated growth in markets like India and Brazil and a 6x quarterly increase in video views, aligning with broader social media trends. Search and Gaming: Bing’s revenue growth surpassed the market, while Game Pass hit a new revenue record, propelled by Black Ops 6 Capital Expenditures: CFO Amy Hood highlighted that half of cloud and AI investments are for long-term infrastructure, positioning the company for sustained growth. 4. Future Outlook Energy Needs: Microsoft, facing higher power demands, plans to revive a reactor at Three Mile Island with Constellation Energy by 2028 to power its AI data centers sustainably. Autonomous AI Agents: Coming in November, these agents will perform tasks with minimal human input, enhancing efficiency. Copilot Studio will allow businesses to customize these agents, with 10 pre-built options to start. Industry Impact: Salesforce has launched Agentforce, signaling increased competition. CEO Mark Benioff recently compared Microsoft’s Copilot to the nostalgic Clippy, stoking rivalry. For further analysis stay tuned
NASDAQ:MSFT
by moonypto
NVIDIA 1D — When “Head & Shoulders” Aren’t Just for the GymOn the daily chart, NVDA has broken out of the descending channel and reclaimed the 50-day moving average (MA50), triggering a classic inverted head and shoulders formation. Price is now holding above the key $113–$114.50 zone, confirming a structural shift. As volume picks up, buyers are eyeing the next levels of resistance. Near-term upside targets: – $119.80 (0.5 Fibonacci) – $127.62 (0.382) – $137.28 (0.236) — primary resistance zone – Extended target — $152.91 (1.0 Fibonacci projection) Technical setup: — Breakout from channel + above MA50 — Inverted head and shoulders pattern completed — $114.50–$118.00 now acts as buyer support — EMA and MA convergence supports trend reversal — Increasing volume on rallies supports bullish momentum Fundamentals: NVIDIA remains the AI and semiconductor sector leader. Growing demand for high-performance GPUs in AI and data centers positions NVDA as a core tech play. Expectations of strong earnings and continued institutional accumulation support the bullish narrative. The confirmed breakout and inverted H&S setup mark a clear structural reversal. As long as price stays above $114.50, the path toward $127–$137 remains the primary target zone, with $152.91 in sight if momentum continues.
NASDAQ:NVDALong
by TotoshkaTrades
3
Bitcoin (BITX) getting ready for a parabolic move? Here is a chart of probably my favorite swing trade for the year. I am keeping it simple with this chart though. I am a firm believer in simple when it comes to trading. I think the previous descension and breakout is playing out very similarly to the current one. Both had a double top rejecting from their respective trendlines following the initial breaks of structure. BITX is currently making its second tap of the the trendline. If it plays out like the previous structure did that would suggest w could see one more low in store. I don't believe this to be the case but if it is this run could be postponed until the end summer/beginning of fall. I think it is more important to point out the relative strength in Bitcoin as of late, the weakness in the US dollar, as well as global liquidity having broke out months ago. I think the most likely scenario is a pullback from this point which will be followed by a higher low printing. I will say I also expect this pullback to be steeper than the one from the previous descension. Bitcoin and Indices are a lot more overextended than they were last time around and the structure in indices is a lot weaker than before. All this being said I am expecting a breakout to occur over the next several weeks just based off probabilities. It all depends on if BTC and indices and hold their respective demand/support levels. Bitcoin needs to hold 85k in order for a summer breakout to occur. For the S&P equivalent level this could be somewhere around 5200-5300. If these assets are not able to hold these levels my confidence will shift pretty dramatically. I would still expect a major rally to take place around the Q4 timeframe but I would be expecting a lot less upside. Price would likely have to chop around for a while before deciding if it wants to continue to the upside. I am basing this off market structure/Dow theory. It is important to take all possibilities into account and ultimately let the charts do the talking.
CBOE:BITXLong
by ChazzyFreshh
3
SoFi Technologies (SOFI, 1D)On the daily chart, SoFi has broken out of its descending trendline, confirmed the breakout with a clean retest of the 0.618 Fibonacci retracement level at $12.33, and is now building upward momentum from this demand zone. This “buy zone” is acting as a launchpad for a potential mid-term move toward higher resistance levels. Key Fibonacci-based upside targets: – $13.48 (0.5 retracement) – $14.64 (0.382 retracement) – $16.07 (0.236 retracement) — within the defined target zone – Extended target: $18.37 (1.0 Fibonacci projection) Technical structure highlights: – Breakout of multi-month downtrend + successful retest – Price now trading above key EMAs (50/100/200) – Volume expansion on bullish candles confirms demand – Daily momentum favors further continuation toward the $14–$16 zone – Premium supply zone above $16 may slow initial momentum but offers long-term potential toward $18+ Fundamental context: SoFi is evolving as a vertically integrated fintech platform with strong brand recognition and growing user engagement across banking, investing, and lending services. As the company narrows losses and strengthens recurring revenue, investor interest in SOFI is growing — particularly as market appetite returns for high-quality fintech with path-to-profitability models. The technical breakout is confirmed. As long as price remains above the $12.33–$12.50 buy zone, the bullish scenario remains valid with targets toward $14.64 and $16.07. A breakout above $16 would activate the full expansion toward $18.37 in the mid-term.
NASDAQ:SOFILong
by TotoshkaTrades
Uber (UBER, 1W) Tightening Structure Ready for BreakoutOn the weekly chart, UBER has formed a strong ascending wedge / tightening channel, showing clear higher lows and repeated rejections near upper resistance. The price is now approaching the apex of the pattern, with a possible breakout setup above $82.42. If confirmed, the projected measured move (H = $27.67) aligns with Fibonacci extension targets at: – $89.86 (1.272) – $93.74 (1.414) – $99.32 (1.618) Technical structure: – Price held support twice, confirming bullish intent – Structure tightening — breakout likely on sustained volume – Bullish divergence forming on the weekly stochastic oscillator – A breakout above $82.42 activates the next impulse wave – Volume is stable, with no signs of heavy distribution Fundamentals: Uber has reached a major financial milestone: consistent profitability and positive EBITDA growth. The company continues to expand across mobility and delivery, with a focus on cost efficiency, platform monetization, and retention. Increased user activity and growing institutional interest support a bullish mid-term thesis. Uber is increasingly seen as a core holding in next-gen tech and services portfolios. The technical structure is approaching resolution. A confirmed breakout above $82.42 opens the door for a move to $89.86 → $93.74 → $99.32. With bullish structure and improving fundamentals, Uber is positioned for the next leg higher. This is a setup worth watching.
NYSE:UBERLong
by TotoshkaTrades
Quantum's Walmart (WMT) Trading Guide 4/28/25WMT’s weekly outlook balances its defensive resilience against macroeconomic headwinds, with a comprehensive synthesis of technical, market, and strategic factors guiding its trajectory for weekly options contracts. The FAME framework underscores WMT’s long-term bullish potential, driven by robust fundamentals (+5% revenue, $0.58 EPS, 21% e-commerce growth) and adaptability (AI, Walmart+), positioning it as a resilient player in a risk-off regime. However, elevated yields (10-year 4.255%, 20-year 4.738%, 30-year 4.721%) and a stable DXY at 99.58 amplify tariff pressures and margin concerns, capping upside and reinforcing a cautious stance. A tactical long bias is favored for weekly contracts, targeting a bounce from $94.36 to $96.47–$98.50, with a short stance viable below $88.50 if support fails. Technical implications highlight bullish momentum on daily (RSI ~40, Stochastic ~28) and weekly (RSI ~44, Stochastic ~32) timeframes, with oversold conditions signaling a rebound potential for weekly contracts if $94.36 holds. Monthly neutral momentum (RSI ~50) suggests consolidation, requiring a breakout above $96.47 to confirm bullish strength. This supports a short-term bounce but advises monitoring for sustained moves. Market influence implications reflect a risk-off environment, with high yields and a stable DXY increasing import costs, particularly amid tariff uncertainty from WMT’s upcoming Trump meeting. The VIX at 24.84 amplifies volatility, favoring WMT’s defensive appeal but heightening risks. WMT’s Q3 FY25 strength and e-commerce growth provide stability, supporting resilience near $94.36. OFD summary and implications reveal bearish pressure from Vanna (-$0.04), Charm (-$0.02), and DEX (-$0.06), driven by put-heavy flow and hedging demand tied to tariff fears. However, GEX (+$0.08) at the $95 strike pins price, stabilizing volatility and supporting a neutral-to-bullish bounce for weekly contracts if $94.36 holds, aligning with oversold technicals. Edge insights bolster the case for a bounce, with institutional buying at $94–$95 signaling accumulation, defensive retail sector strength outperforming cyclicals, and low short interest (1.4%) offering squeeze potential above $96.47. These factors enhance confidence in a tactical long bias for weekly contracts, provided support holds. Strategic outlook implications emphasize consolidation near $95.09, with $94.36 as a critical pivot. A break below risks $88.50, driven by tariff fears and bearish options flow, while a move above $96.47 targets $98.50, fueled by oversold signals and institutional support. The VIX at 24.84 and put-heavy options flow underscore volatility, but WMT’s defensive positioning mitigates downside, favoring a bounce in a risk-off regime. In summary, WMT’s weekly outlook hinges on defending $94.36, with oversold technicals, GEX pinning, and institutional buying supporting a bounce to $96.47–$98.50 for weekly contracts. Tariff risks, high yields, and DXY stability maintain a risk-off backdrop, capping upside and requiring vigilance for a break below support, which could shift bias to bearish. This balanced approach leverages WMT’s defensive strengths while navigating weekly volatility, aligning with Buffett’s preference for resilient businesses with tactical opportunities.
NYSE:WMT
by QuantumEdgeAnalytics
Nokia:Inverted Head and Shoulders Structure + Retest of BreakoutOn the weekly chart of Nokia, a classic Inverted Head and Shoulders reversal pattern has formed. The breakout above the neckline occurred with increased volume, confirming the strength of the move. Currently, the price is undergoing a standard technical retest of the neckline from above — a typical phase before a potential continuation higher. The structure remains active: the projected height (H) points to an initial target at $5.48, based on the distance from the neckline to the head. If momentum continues, Fibonacci extension targets are located at $6.18 (1.272), $6.55 (1.414), and $7.08 (1.618). Technical view: the retest of the neckline is happening on declining volume, strengthening the probability of a bullish reversal. EMA 50/100/200 are beginning to align in a bullish crossover. The ascending channel structure also supports the upward movement. Fundamentals: Nokia is progressing with its strategic programs in 5G and upcoming 6G network technologies, reinforcing its long-term growth prospects. Improved financial performance and the recovery in demand for telecommunications infrastructure amid global digitalization trends continue to support investor interest in the stock. The Inverted Head and Shoulders pattern is confirmed by the breakout and current retest. As long as the price holds above the neckline, the bullish scenario toward $5.48 and beyond remains intact. This is a medium-term trend reversal structure — strong setups like this form the foundation for major moves. Don’t miss them.
NYSE:NOKLong
by TotoshkaTrades
ICON — Breakout from Rectangle with H Projection Targeting $700ICON (3D) — Technical Structure Analysis ICON has broken out from a prolonged horizontal rectangle pattern ($380–$540). The move activated a measured move structure with two H-sized waves. The first H was completed. The second H projects a move to the $700 area. Key points: -Confirmed breakout from range -First H = 153 pts, completed -Second H = 162 pts, targeting $700 -Price holding above breakout zone ($515–$541) ICON has moved out of accumulation and entered trend expansion. As long as the support holds, the scenario remains valid. The technical model targets the $700 area.
TASE:ICONLong
by TotoshkaTrades
LIC | Technical Structure Forming – View Only🔍 Stock: LIC (NS: LICI) 📌 Type: View Only – Not a Buy/Sell Recommendation LIC has been consolidating after a decent upside move in recent weeks. Currently, the stock is trading around a key demand zone, indicating potential accumulation — but confirmation is still awaited. 🧩 Technical Overview: Support Zone: ₹802 – ₹816 Resistance Zone: ₹842 – ₹861 Trend: Bulish 🚫 Note: This analysis is shared for educational and observational purposes only. It is not intended as a buy or sell recommendation. Please do your own research or consult a financial advisor before taking any action. 💬 Share your views or charts below! Tags: #LIC #LICIndia #LICI #NSE #StockMarketIndia #TechnicalAnalysis #TradingViewIndia #PriceAction #ViewOnly #NotARecommendation #EducationalPurposeOnly
NSE:LICILong
by vipin95379845
SBI: Inverse H&S BreakoutThe Inverse Head and Shoulders pattern is a bullish reversal chart pattern that signals a potential trend reversal from bearish to bullish. It consists of three key components: Structure of the Pattern: Left Shoulder: A price decline followed by a temporary rally. Head: A deeper decline forming the lowest point, followed by another rally. Right Shoulder: A decline similar in size to the left shoulder but not as deep as the head, followed by a move higher. Neckline: A resistance level that connects the highs of the two rallies after the left shoulder and head. The Inverse Head and Shoulders pattern in SBI, with a neckline at ₹783, indicates a potential bullish reversal. The stock has formed a well-defined left shoulder, head, and right shoulder, suggesting that selling pressure is weakening. The target price for this breakout is ₹900 calculated by measuring the distance from the head’s low to the neckline and projecting it upwards. If the stock sustains above the neckline, it could gain further momentum. However, traders should consider placing a stop-loss at 730 to manage risk in case of a failed breakout.
NSE:SBINLong
by TradingSutra
Quantum's Premium IWM Weekly OutlookSentiment Overall Sentiment: Bearish with potential for reversal. Options Activity: Recent data shows elevated put volume over calls (e.g., 8 puts Ascending Triangle DEX suggests a bearish directional bias. Posts on X indicate traders are eyeing short setups, reinforcing this sentiment. 1 OTM Premiums: 0DTE (April 7 expiration): Call: $182 strike, premium $1.20 (moderate IV, ~35%). Put: $180 strike, premium $1.35 (moderate IV, ~35%). Weekly (April 11 expiration): Call: $182 strike, premium $1.45 (moderate IV, ~32%). Put: $180 strike, premium $1.40 (moderate IV, ~32%). Notes: Premiums are kept under $1.50 for cost efficiency in 0DTE and weekly trades. IV levels are moderate, reflecting recent volatility spikes but not extreme conditions, making these contracts attractive for short-term plays. Technical Indicators: Weekly EMAs (8/13/48): The 8-week EMA ($198.50) is below the 13-week ($202.10) and 48-week ($208.30), confirming a downtrend. RSI (14-week): 32, nearing oversold territory, hinting at a possible bounce. Market Context: Small-cap stocks like IWM have been under pressure due to tariff fears and a hawkish Fed stance. However, oversold conditions and seasonal strength in April could signal a relief rally. Potential: Continuation of the downtrend is likely unless a catalyst reverses sentiment, but a short-term bounce to $185–$190 is plausible given oversold readings. Tariff Impact Exposure: Moderate to severe. Analysis: IWM tracks the Russell 2000, comprising small-cap U.S. companies, many of which are domestically focused (e.g., manufacturing, retail). A 10% universal tariff, 25% on Canada/Mexico, or 46% on Vietnam could raise input costs for these firms, squeezing margins. Sectors like industrials (20% of IWM) and consumer discretionary (15%) are particularly vulnerable. However, tariff impact may be overstated—rising interest rates and a strong dollar are likely stronger drivers of recent weakness. Critically, the narrative around tariffs often amplifies fear beyond fundamentals, offering contrarian opportunities if panic subsides. News/Catalysts Recent News: Trump’s tariff rhetoric intensified last week, with small-caps hit hardest (IWM down 9.5% in 1M). The Fed’s hawkish December stance continues to weigh on risk assets. Upcoming Events: April 8: Consumer Credit data release—could signal consumer health, critical for small-cap earnings. Mid-week: Potential tariff policy updates—speculative but impactful. Speculative Catalysts: X posts highlight short interest in IWM and oversold conditions, suggesting a squeeze potential. A surprise Fed pivot or tariff rollback could spark a massive rally. Alignment: Small-caps are sensitive to economic data and policy shifts, making IWM a prime candidate for volatility-driven moves. Technical Setup Weekly Chart: Key Levels: High Volume Node (HVN): $195–$199 (prior support, now resistance). Monthly Open: $199.78 (resistance). Weekly Low: $176.67 (support). Trend: Downtrend since March peak ($208.52), testing year-lows. One-Hour Chart: Support: $179–$180 (confluence with weekly low). Resistance: $182.50–$184 (prior consolidation zone). 10-Minute Chart: Entry/Exit: Bullish: Break above $181.50 (8-EMA) with a hammer candle for a long to $183. Bearish: Breakdown below $180 with volume for a short to $177. EMAs (8/13/48): 8 ($181.20) > 13 ($181.00) < 48 ($182.30)—choppy, no clear trend intraday. Indicators: RSI (14): 38 (10-min), neutral but rising—watch for divergence. MACD: Near zero line, flat—momentum stalling. Options Data Weekly Overview Gamma Exposure (GEX): Bearish—pinning near $180–$182, dealers hedging accelerates downside below $180. Delta Exposure (DEX): Bearish—put-heavy activity signals directional selling. Vega Exposure (VEX): Neutral—moderate volatility potential, no extreme IV spike expected. Implied Volatility (IV): Moderate (~32–35%)—elevated but manageable, favoring sellers over buyers. Open Interest (OI): Bearish—high OI at $180 put and $185 call strikes, capping upside. Potential Price Targets Bullish: $185 (+2.2%)—tests weekly HVN; $190 (+5%) if momentum builds. Bearish: $177 (-2.3%)—revisits year-low; $170 (-6.2%) on tariff escalation. Trade Idea Bullish 0DTE (April 7): Trade: Buy $182 Call @ $1.20. Entry: Break above $181.50. Target: $183 (profit $0.80, +66%). Stop: $180.50 (loss $0.70, -58%). Bearish 0DTE (April 7): Trade: Buy $180 Put @ $1.35. Entry: Breakdown below $180. Target: $178 (profit $0.65, +48%). Stop: $181 (loss $0.85, -63%).
AMEX:IWM
by QuantumEdgeAnalytics
Berkshire Hathaway | No More Apple Pie & Bank Bread!No More Apple Pie and Bank Bread | Buffett’s Recipe for Market Caution Berkshire Hathaway has recently disclosed its earnings amid fluctuating around a $1 trillion valuation. A notable update is its continued reduction of stakes in overvalued assets, including a 20% decrease in holdings of Apple and Bank of America, boosting its cash reserves to $325 billion Although Warren Buffett himself isn't favoring share buybacks at present, Berkshire Hathaway stands as a compelling investment option Why Berkshire Hathaway's $325 Billion Cash Pile Signals Market Caution The company's net earnings remain subject to significant fluctuations due to rules requiring valuation changes of investment holdings. However, there was a slight decline in operating earnings, mainly driven by lower insurance underwriting income. Despite this, that segment is historically volatile, and year over year aka YoY, the company has maintained strong performance. Yea2date aka YTD, operating earnings have risen over 10%, totaling just under $33 billion compared to just below $29 billion last year. This points to an annualized earnings estimate of approximately $44 billion, implying a price2earnings aka P/E ratio of about 22, without factoring in over $320 billion in cash and significant investment holdings. Excluding cash and investments, the adjusted P/E ratio is closer to single digits. Share buybacks have paused, reflected in a ~1% decrease in the outstanding shares YoY, signaling Berkshire's assessment of current market valuations. Segment Highlights The various business units within Berkshire Hathaway showcase its robust asset base and earning capacity. Insurance underwriting income saw a sharp YoY drop, but other business areas performed strongly. Income from insurance investments remained solid, and BNSF, its railroad subsidiary, also showed strong results despite a double digit YoY decline. Berkshire Hathaway Energy continues its growth, cementing its position in the utility sector with significant renewable energy ventures. For context, NextEra Energy (NEE), with a market capitalization of $160 billion, posted quarterly earnings around 10% higher. Berkshire's other controlled and non-controlled businesses contribute over $13 billion annually, underpinning its diversification and consistent earnings performance. This strength across segments underscores its formidable financial health. Market Context Currently, market valuations are elevated by historical standards. Excluding periods of earnings dips, market enthusiasm is exceptionally high, with the S&P 500 P/E ratio nearing 30x, approaching levels last seen in 1999. Buffett and Berkshire appear to view a 3% yield from such a P/E as unattractive, especially when bonds offer higher returns. The 2008 Playbook Berkshire's track record of effectively utilizing its cash reserves is notable. Excluding its insurance float, the company still holds $150 billion in cash. During the 2008 financial crisis, Berkshire leveraged its liquidity for strategic investments in companies like General Electric, Swiss Re, Dow Chemical, and Bank of America, as well as finalizing the full acquisition of BNSF in 2010. This proactive use of capital proved advantageous. The current strategic sale of assets suggests Berkshire is preparing for potential market downturns. Given high S&P 500 valuations, reallocating part of an S&P 500 position into Berkshire Hathaway could be wise, ensuring exposure to a cash-rich portfolio capable of seizing future opportunities. Meanwhile, Berkshire’s earnings are valued lower than the broader market, potentially minimizing major downturn risks. Investment Risks A key risk is that timing the market is inherently challenging, with the adage "time in the market beats timing the market" serving as a caution. If Berkshire's market outlook is incorrect, its $300+ billion in cash could underperform while broader markets remain strong, which would diminish its appeal as an investment. Final Thoughts Berkshire Hathaway has taken the bold step of liquidating some of its most significant and priciest holdings, opting to incur capital gains taxes to increase liquidity. This move has bolstered its cash position to $325 billion, $150 billion above its float level. Meanwhile, its strong operational businesses continue generating healthy cash flow. Drawing on its successful strategies during the 2008 crisis, Berkshire appears to be positioning itself for another downturn amid current high market valuations. We advise investors to consider shifting part of their S&P 500 exposure into Berkshire Hathaway for enhanced diversification and potential benefits in a market correction, long story short Berkshire Hathaway remains a robust investment opportunity but wont make millionaire! What do you think moonypto fam?
NYSE:BRK.A
by moonypto
Snow White's very low ratings - Bullish Disney stock ?The SnowWhite IMDB rating can't get any worse - could the same be said of Disney stock? Price is the ultimate proof but buying the shares of a well established company when sentiment is at a low point can be a fruitful endevour. The poor box office showing + very weak ratings for Snow White - maybe a contrarian buy signal ? A) The stock is attempting a long term double bottom via is 2020 + 2023 lows B) A breakout over the downtrend line (orange) could confirm a bullish trend change Bottom of the ratings ➡️ Bottom in the stock? NYSE:DIS
NYSE:DISLong
by jasperlawler
GOOGLE at Key Support Level – Rebound Towards $190?NASDAQ:GOOGL is experiencing a corrective move after rejecting from the upper boundary of the ascending channel. This rejection has triggered increased selling pressure, driving the price back toward the channel's lower boundary. The confluence of trendline support and the overall bullish market structure enhances the likelihood of a rebound from this level. If buyers defend this level, we could see a push toward $190, which aligns with the midline of the channel and could serve as a short-term target. A successful bounce from here would reinforce the ongoing bullish momentum within the channel. However, if price fails to hold above this support zone, the bullish outlook could weaken, potentially signaling further downside. Traders should watch for bullish confirmation signals, such as strong rejection wicks, increased volume, or bullish engulfing patterns, before entering long positions. If you agree with this analysis or have additional insights, feel free to share your thoughts! 🚀
NASDAQ:GOOGLLong
by DanieIM
42