🌟 Revolutionary Battery Stock Gains Momentum with 3D Silicon-Anodes

Market Movers Uncovered: $ISRG, $ASML, and $ENVX Analysis Awaits ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­

Ticker Reports for July 22nd

surgical robot in operating room with surgeons

Intuitive Surgical Stock Outperforms Market: Highs on the Horizon

Intuitive Surgical’s (NASDAQ: ISRG) stock bucked the broad-market selloff because of its operational quality, performance, outlook, and balance sheet, which has absolutely nothing wrong with it. The B/S highlights for Q2 include a 490 basis point increase in cash and securities and the net cash position. The net cash position is truly amazing because this company has zero debt: net cash is regarding the company’s total liability. Its $7.68 billion in cash and investments is more than 4.25x of total liabilities, leaving it in the strongest position it could be in to sustain its high double-digit growth pace. 

Intuitive Surgical Leads MedTech: Analysts Raise Targets

Intuitive Surgical is thriving and leading the MedTech Industry. Its 14% top-line increase leads peers like Johnson & Johnson (NYSE: JNJ) and Abbott Laboratories (NYSE: ABT), which also produced significant growth. More importantly, Intuitive’s $2.01 billion in revenue outpaced the consensus reported by MarketBeat and led analysts to raise their estimates and stock price targets. 

Revenue growth outpaced the consensus by 100 basis points on strength in system placement procedure volume and Instruments & Accessories growth. Procedures count grew by 17% on a 14% increase in installed machines, with strength seen in the da Vinci 5 offering. Sales of da Vinci 5 accounted for 20.5% of machines installed in the quarter. Sales of instruments and accessories, the company's recurring revenue stream, accounted for 62% of sales and is up 60 bps sequentially.

There are some concerns that the procedure count is driven primarily by system installation, but headwinds include sluggishness in China and bariatric surgery. The analysts' chatter suggests that headwinds are expected to diminish and be offset by general surgical procedure volume growth and broadening acceptance of AI-powered surgical assistance. The long-term outlook includes a 17% to 18% top and bottom line forecast through 2028, and it may be cautious. 

The margin news is among the more impressive details. The company widened its margin on a GAAP and adjusted basis to drive robust increases in earnings. The GAAP net income rose by 25% and adjusted by 26% to leave adjusted earnings at $1.78, up 25% compared to last year and a quarter better than expected. The takeaway is that Intuitive had a cash-flow positive quarter despite CAPEX and increased shareholder equity by 10%. Intuitive does not give guidance but shows clear momentum and robust cash flows that sustain the strong balance sheet, setting the company up to potentially initiate dividend payments or buy back significant amounts of stock. 

Analysts Lead Intuitive Surgical Stock to New Highs

The consensus price target reported by MarketBeat.com lags the ISRG stock price, but there is a high level of conviction in the Moderate Buy rating, and the price target is rising, providing support for the market. MarketBeat.com tracks 19 analysts with current ratings, and 10 of them revised their price targets following the release, leading to the range's high end. Their activity increased the consensus by nearly 10% compared to last month and included a new high price target of $525, a 15% upside to current price action. 

ISRG stock surged on the news and analysts' upgrades, rising more than 10% to set a new all-time high. The move shows strong support at the 30-day moving average and a trend-following signal compounded by bullish signals in the indicators. The MACD and stochastic align with a rising market, suggesting new highs are possible. 

Insiders have sold into the rally this year and are likely to continue. However, their activity is offset by robust institutional buying. The institutions own about 85% of the stock and have bought on balance this year, providing a strong tailwind for the market. 

Intuitive Surgical ISRG stock chart

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ASML sign at their Silicon Valley office in San Jose, California, ASML Holding N.V. is a Dutch multinational corporation

Has This Leading Tech Stock Halted the AI Surge?

ASML Holding N.V. (NASDAQ: ASML) designs and manufactures extreme ultraviolet (EUV) lithography machines that use light to precision print microscopic patterns on silicon wafers. These gigantic 330,000-pound machines are used to mass-produce the world’s computer chips. ASML is often the barometer of the health of the semiconductor industry. Their lithography machines must be ordered two years in advance, and they take nearly 250 shipping containers to deliver weighing as much as two Airbus A320s. The company just released its Q2 2024 earnings report with accompanying lowered Q3 2024 revenue guidance, sending shares lower by over 20% in the following days. This also caused the rest of the semiconductor stocks to sell off. Investors are mulling whether the sell-off will crimp the AI Boom.

ASML operates in the computer and technology sector. The company is the apex predator with virtually no other competitors and a near-monopoly on EUV lithography machines. ASML supplies its machines to the world's leading chip manufacturers, including Intel Co. (NASDAQ: INTC), Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE: TSM), and Samsung Electronics Co. (OTCMKTS: SSNLF).

ASML Owns a Near-Monopoly in the Photolithography Market

In the semiconductor industry, there are hands-down dominant players. For example, Taiwan Semiconductor Manufacturing Co., often referred to as just Taiwan Semi, has a 62% market share of the world’s computer chip production. NVIDIA dominates the AI chip market with nearly 90% market share. However, one company has an even tighter lock in its segment, EUV lithography.  

Thanks to the mind-numbing barriers to entry, ASML commands more than a 90% market share in the global photolithography market. This company is so dominant that it has to comply with various nations' export controls, especially those pertaining to Chinese sales.

ASML stock chart

ASML Stock Triggers a Rising Wedge Breakdown

The daily candlestick chart on ASML illustrates a rising wedge breakdown that was triggered on its Q2 2024 earnings release. The rising wedge is comprised of converging upper and lower trendlines. The breakdown occurs when shares fall below the lower ascending trendline. ASML triggered the gap down from $1,060 to $979.99 on July 17, 2024. Shares continued to sell off for the next two days as sellers continued to unwind positions amidst the macro market sell-off in technology stocks gathered steam. The daily relative strength index (RSI) is falling toward the oversold 30-band. Pullback support levels are at $880.59, $826.50, $778.67, and $751.69.

ASML's Q2 Outperformance and Adjusted Q3 Expectations

ASML reported a Q2 2024 EPS of $4.46, beating consensus estimates by 34 cents. Revenue fell 9.5% YoY to $6.91 billion, beating the $6.66 billion consensus estimates. Gross margin was 51.5%, and net income of $1.78 billion. ASML expanded its booking by 23.7% YoY to $6.06 billion.

ASML issued weaker-than-expected downside revenue guidance for Q3 2024 of $7.44 billion to $8.11 billion versus $8.41 billion consensus estimates. Gross margins are expected to be between 50% and 51%. ASML expects R&D costs to be around $1.2 billion and SG&A costs to be around $322 million.

However, ASML reaffirmed its outlook for the full year 2024. According to consensus estimates, it expects 2024 to see revenues of $30 billion versus $29.97 billion, similar to those in 2023.

AI Is Not Slowing Down But Ramping Up

Investors fearing that AI has run its course can relax. ASML CEO Christopher Fouquet put those fears to rest as he commented, “Our outlook for the full year 2024 remains unchanged. We see 2024 as a transition year with continued investments in both capacity ramp and technology. We currently see strong developments in AI, driving most of the industry recovery and growth ahead of other market segments.” Fouquet also commented that overall semiconductor inventory levels continue to improve. AI is driving most of the industry’s recovery and growth. Memory end markets may see memory clients look to upgrade their systems in preparation for an anticipated surge in 2025.

ASML Holding N.V. analyst ratings and price targets are at MarketBeat. There are 12 analyst ratings comprised of one Strong Buy, nine Buys, and two Holds, with a consensus price target 28% higher at $1,147.80.

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Electric car charging

Revolutionary Battery Stock Gains Momentum with 3D Silicon-Anodes

As promising as next-gen mobile technology is with the growth of the internet-of-things (IoT), edge artificial intelligence (AI), and autonomous electric vehicles (EVs), the limitations lie in the ability to power them. Current lithium-ion batteries are reaching their limits when it comes to performance. AI applications take considerably more electricity to operate. This limits the capacity to perform edge AI through portable devices like smartphones, tablets, laptops, and wearables. Enovix Co. (NASDAQ: ENVX) is looking to change that with its 3D silicon-anode batteries.  

Enovix operates in the oils/energy market, competing with battery makers QuantumScape Co. (NYSE: QS), Energizer Holdings Inc. (NYSE: ENR), and Samsung Electronics Co. Ltd. (OTCMKTS: SSNLF).

Here’s How Enovix’s 3D Silicon-Anode Technology is Better

Current lithium-ion batteries use graphite anodes. Silicon stores lithium much better than graphite and has 10x higher energy density. This enables faster charging and enhanced safety. However, the inherent problem is that silicon expands up 4x its size during charging cycles, causing it to crack. For this reason, silicon is used in small amounts mixed with graphite in current lithium-ion batteries, which are reaching their limitations.

Enovix’s patented 3D silicon-anode batteries implement a structural constraint system that keeps the silicon particles under constant pressure to limit swelling and cracking. The Enovix battery minimizes swelling to less than 2% cell thickness after 500 cycles. This enables it to maintain electrical contact between components to improve the battery life cycle. Enovix's batteries have a 100% active silicon anode that provides high energy and high capacity. Its BrakeFlow technology, comprised of 100 micro-resistors in its 100-electrode stack to protect each Enovix cell, makes it safer to minimize battery heat and potential for explosions.

Enovix ENVX stock chart

ENVX Triggers a Rising Wedge Breakdown

The daily candlestick chart for ENVX illustrates a rising wedge breakdown pattern. A rising wedge is comprised of converging rising trendlines with higher highs and lower lows. The breakdown was triggered when ENVX fell below the lower trendline at $17.68. The daily relative strength index (RSI) fell to the 52-band. Pullback support levels are at $14.78, $12.45, $10.12, and $8.13.

Enovix Generates Revenues

Enovix reported a loss of 31 cents in Q1 2024, which aligns with consensus estimates. Revenues surged 26,260% to $5.27 million, up from $21,000 a year ago, versus $3.7 million consensus estimates. Revenues were generated from battery sales to IoT customers. Stronger revenues and a favorable product mix enabled its first-ever positive non-GAAP gross margins. The company aims to reduce over a third of its fixed costs, amounting to more than $35 million annually, by the end of the year. A more efficient cost structure will reduce capital needs and accelerate the company's path to profitability.

Enovix's Strategic Business and Factory Updates: Driving Growth and Innovation

Factory acceptance testing (FAT) is complete for its Gen2 Agility line and nearing completion for its high-volume Gen2 Auto line. Site acceptance testing (SAT) has been underway for both lines, enabling the first samples of EX-1M batteries to be produced in Q2 2024 and the capacity to support qualifications for multiple leading customers.

Enovix reached a development agreement with a top-5 smartphone original equipment manufacturer (OEM) by unit volume in the quarter. Enovix is building EX-1M battery cells in Fremont, aligned with specifications received from leading smartphone customers. Six of the top-8 smartphone OEMs in the world (by unit volume) will be receiving samples, which will begin shipping in Q2 2024.

The company stated, “Our thesis with a Mobile-first approach to product development is that the smartphone sets the standard for battery technology in consumer electronics broadly, which should also allow us to translate success in smartphones to other areas. During our customer visits in the first quarter of 2024, including at the Mobile World Congress trade show, we received positive feedback of this approach as we saw interest in EX-1M for not only smartphones, but IoT products as well.”

Enovix expects Q2 2024 revenues between $3 million to $4 million and an adjusted EBITDA loss of $26 million to $32 million. Non-GAAP EPS loss of 22 cents to 28 cents is expected in Q2 2024.

Key Agreements and Partnerships: Driving Enovix's Expansion

On June 25, 2024, Enovix signed an agreement with a technology company to provide its silicon batteries and packs for a mixed-reality headset. The company will receive an immediate one-time payment for the tooling to support battery pack specifications and follow-up payments upon the delivery of samples and production quantities. There is speculation that the unnamed technology company could be Apple Inc. (NASDAQ: AAPL) or Meta Platforms Inc. (NASDAQ: META), both of which have headquarters in California.

On June 26, 2024, Enovix signed a memorandum of understanding (MOU) with Elentec, a globally trusted battery manufacturing partner, to support its growth with target customers worldwide. Enovix can fast-track and utilize Elentec's battery pack design and high-volume manufacturing capability through a strategic partnership. Contingent on the continued success of business and technical negotiations, the companies will collaborate in forming custom development of Enovix battery cells into multiple battery packs for consumer, military, and industrial applications.

Enovix analyst ratings and price targets are at MarketBeat. There are seven analyst ratings, including one Strong Buy, five Buys, and one Hold rating.   

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