Ticker Reports for November 10th
California Resources Stock Could Be a Huge Long-Term Winner
With all the talk around AI and data centers, markets have been swooning over companies that can provide one key resource to power these trends: electricity. AI workloads run on data centers that need a lot of electricity. They must also run 24/7 to ensure users can always access the data. Additionally, companies that run these data centers vastly favor the use of renewable energy for power.
This has led to a trend of recommissioning nuclear reactor sites. Nuclear energy is renewable, but also much more reliable than wind and solar. Their energy generation ability can fall due to a lack of sunlight or wind, making it a poor choice for powering a data center. This has greatly benefited firms that specialize in nuclear energy. Constellation Energy (NASDAQ: CEG) is an example of this, with shares up over 100% in 2024.
It’s also leading investors to look at small modular reactor (SMR) stocks. NuScale Power (NYSE: SMR) stock is up over 500% in 2024. However, SMR technology is still yet to be proven. So far, no SMRs are operational in the U.S. It seems the market is running out of places to turn to when it comes to investing in powering data centers at a reasonable price.
However, there is one company that may provide an interesting solution to this problem. That company is California Resources Corporation (NYSE: CRC) It wants to power data centers not with nuclear energy, but by making a traditional fossil fuel carbon neutral. Below, I’ll detail CRC’s plan and give my opinion on the potential of the stock.
Detailing CRC’s Unique Plan for Fossil Fueled Data Centers
CRC is primarily an oil and natural gas producer. The company’s plan to power a data center involves using natural gas in conjunction with carbon sequestration. This involves injecting carbon dioxide produced when natural gas is turned into electricity deep underground into depleted oil and gas reserves. Natural gas, like nuclear, can produce energy 24/7, allowing it to fulfill the reliability needs of data centers.
This would prevent natural gas's carbon from entering the atmosphere. This contributes to the prevention of global warming caused by rising carbon levels in the atmosphere. It is CRC’s hope that data center companies will see this as a reasonable solution to power their infrastructure while also maintaining their commitment to a net-zero future.
On the carbon sequestration front, CRC has made significant progress recently. In late October, California's Kern County approved, unanimously, a permit for the Carbon TerraVault I (CTV I) carbon capture and storage project. However, it still needs Environmental Protection Agency (EPA) approval. It expects an answer by the end of 2024.
If approved, the company will begin construction on the first-of-its-kind project in the Golden State. It plans to start sequestering carbon by year-end 2025. This is one of the two key parts of the plan CRC hopes to execute. Now, I’ll examine whether the company can actually generate the required electricity to run an AI data center.
CRC Can Help Data Centers and The State of California
According to CEO Francisco Leon in the company’s Nov. 7 earnings call, it does have the required capacity. Leon said, “Having existing power required to run these centers, coupled with the desire to decarbonize that power, creates a unique first-mover advantage for CRC." He went on to say the company is in an “unrivaled” position to provide AI data center solutions in California.
The company is also more broadly set up to help California meet its legislatively mandated zero-carbon electricity goal by 2045. In 2023, 39% of California’s in-state electricity generation came from natural gas. The company can use its carbon-sequestration technology to keep natural gas relevant. However, the company still needs the state to make decisions on CO2 pipeline regulations. The state needs new pipes to facilitate large-scale carbon sequestration.
CRC Looks Attractive Long Term
Overall, CRC's carbon sequestration efforts are still in the relatively early innings. Any possible data center agreements would have to follow further progress made there. I see CRC as a company with a significant amount of long-term upside potential due to the opportunities discussed above.
Also, its average valuation vs. its sector, low debt, and solid free cash flow for its size make me feel secure in the downside risk. Wall Street sees solid 12-month upside in the stock, with the six most recent price targets implying upside of 15%.
Bill Gates's Next Big AI Bet: Stargate
In February 2016… when almost nobody was talking about artificial intelligence….
I picked Nvidia as one of my favorite stocks.
Shares have jumped by more than 20,000% since then.
Dot Ai IPO: CEO Ed Nabrotzky Shares Vision for Logistics Future
The logistics industry is a cornerstone of global commerce, and it is on the cusp of a transformative era powered by artificial intelligence (AI). At the forefront of this revolution is Dot Ai, a pioneering startup poised to redefine asset intelligence and reshape supply chain operations. Dot Ai's upcoming Nasdaq listing, in conjunction with its strategic partnership with ShoulderUp Technology Acquisition Corp. (SPAC) (NASDAQ: SUAC), presents a compelling opportunity for investors seeking to tap into the explosive growth of AI-driven logistics.
Dot Ai: Redefining Asset Intelligence
Dot Ai's core mission is to empower businesses with real-time visibility and control over their assets.
"We all want to know where our things are, how many things we have, [and] are our things getting to the right place at the right time?" CEO Ed Nabrotzky said in an interview with MarketBeat’s Bridget Bennett.
This simple question drives Dot Ai's development of its core product, a real-time location system (RTLS) that leverages AI to provide granular, actionable data for a wide range of enterprise-level applications.
These include inventory management, manufacturing optimization, and enhanced security for military and medical logistics. Dot Ai's technology also addresses critical safety needs and streamlines complex operations in sectors like mining, construction, aviation, and yard management. The diversity of applications showcases Dot Ai's versatility and its potential to disrupt multiple industries.
The Technological Edge: Fusing RFID, Vision, and AI
Dot Ai's competitive advantage lies in its unique and proprietary edge data collection system. This technology goes beyond traditional solutions by seamlessly integrating RFID, computer vision, and AI. This trifecta empowers businesses to make proactive decisions, not just reactive ones.
"What's unique about us is that we're not just an RFID company supplying the RFID; we're marrying it with the vision systems and the AI back end that allows that data to be useful in the workflow,” Nabrotzky explained in the interview.
RFID tags provide the initial identification and tracking of assets. Computer vision adds another layer of intelligence, capturing visual data that RFID alone cannot, such as damage detection or verification of contents. Critically, Dot Ai's backend analyzes this combined data stream to generate predictive insights.
"It's really kind of an exciting and unique way that we've created a way to dynamically gather this data and then make it meaningful to an operator. To get my things to the right place at the right time,” Nabrotzky said.
This predictive capability is a game-changer in logistics, moving beyond simple tracking to proactive management. It enables businesses to anticipate potential bottlenecks, optimize routes, and preemptively address potential issues before they escalate into costly disruptions.
Competing in the AI-Driven Logistics Arena
The market for AI-driven logistics solutions is experiencing rapid growth, attracting numerous competitors. However, Dot Ai differentiates itself through its fully integrated approach. While many competitors focus solely on software or hardware, Dot Ai provides a comprehensive solution. Its proprietary edge data collection system, combined with its powerful AI backend, offers a seamless and thorough approach to asset intelligence, providing a critical competitive advantage.
Fueling Growth: A Multi-Pronged Strategy
Dot Ai has witnessed significant traction, securing pilot programs and contracts with large multinational clients. The company’s growth strategy focuses on expanding its customer base across diverse sectors, deepening relationships with existing clients, and continuous innovation to stay ahead of the curve. Dot Ai also leverages strategic partnerships for channel development, technology integration, and international expansion, particularly in Europe and Southeast Asia. Furthermore, the company is exploring avenues for data monetization and strategic acquisitions.
Nabrotzky shared in the interview that the administrative and research and development team at Dot Ai makes him most excited about the company's future growth potential. He shared more about one of the researchers responsible for Verizon’s 5G program coming on board at Dot Ai. The company just announced a new VP of Global Sales Friday, who Nabrotzky says will have an immediate impact on the company’s growth.
Financials and Funding: Laying the Groundwork for Revenue
As a pre-revenue company, Dot Ai has relied on over $7 million in seed funding, grants, and research programs. This investment has enabled the development of its cutting-edge technology, the establishment of global operations, and the cultivation of key partnerships. While the company currently operates at a net loss, Dot Ai has accumulated a backlog of hardware orders and boasts a growing roster of lighthouse customers, validating its market traction and laying the groundwork for future revenue streams.
Going Public: Partnering with ShoulderUp for Nasdaq Launch
Dot Ai's upcoming Nasdaq IPO, anticipated for the second half of 2024, is a significant catalyst for its growth trajectory. This public listing, facilitated through a strategic partnership with ShoulderUp Technology Acquisition Corp., will provide Dot Ai with the capital necessary to scale its operations, expand its market reach, and accelerate its research and development efforts. ShoulderUp's expertise in the SPAC market, coupled with its established network, offers invaluable support for Dot Ai's public debut.
Weighing the Risks and Rewards: Dot Ai's Investment Potential
While Dot Ai showcases significant promise, investors should carefully evaluate the risks inherent in investing in a pre-revenue, growth-stage technology company. The competitive terrain is intensifying, technological advancements require ongoing investment, and the company's success is partly contingent on the strength of its partnerships. The inherent volatility of the tech sector also poses a risk.
Risk Factors: Navigating the Uncertainties
Given its pre-revenue status and reliance on external funding, Dot Ai is subject to several risk factors. These include the challenge of scaling operations effectively, potential delays in achieving profitability, and dependence on successful technological development. Competition within the rapidly evolving AI-driven logistics market also poses a risk, along with the company's reliance on key partnerships and macroeconomic factors affecting the broader tech industry.
Investment Perspective: A Bet on the Future of Logistics
Despite these risks, Dot Ai presents a compelling investment opportunity for those who believe in the transformative potential of AI in logistics. The company's unique technology, growing customer base, and strong leadership team, combined with the upcoming Nasdaq listing, offer investors a chance to participate in this dynamic market. Interested investors can access S-4 filings on the SEC website or contact company leadership for more information.
A Glimpse Into the Future: Dot Ai's Vision
Dot Ai is more than just a technology company. It is a vision for the future of logistics. By empowering businesses with real-time, actionable intelligence, Dot Ai aims to optimize supply chains, enhance security, and drive efficiency across a wide range of industries. As the company prepares for its Nasdaq listing, investors and industry experts will be watching closely to see if Dot Ai can fulfill its potential to revolutionize global logistics.
Gold Surge Sparks Fears: Is Your IRA Prepared?
Welcome to the financial rollercoaster of 2024, where inflation is persistent, stock markets are overinflated and volatile, global conflicts are intensifying, and the national debt is reaching new heights.
These challenges aren't distant headlines; they're impacting your everyday finances.
The Hottest Markets to Watch After the Fed's 25 Bps Rate Cut
The FOMC cut interest rates as expected, leaving the market feeling good about inflation and the economy. The news sent a wave of relief through the stock market, alleviating uncertainty and helping clear the outlook for 2025. The result is bullish; the NASDAQ Composite (NASDAQ: QQQ) broke out of its trading range to set new highs, and it and other indexes will likely move higher over the next month, quarter, and year.
The Fed has removed uncertainty and cleared the outlook, and other positive forces are in play to sustain upward pressure on stocks as the rally broadens. Those include AI and a business-friendly President. Regarding AI, demand for infrastructure and services will drive results in the tech sector, while AI-driven efficiency and productivity improvement will do the same for all others. Regarding Trump, his business and consumer-friendly policies aided a near-70% increase in the S&P 500 during the first administration and will likely provide similar support for stocks the second time around.
Chips Stocks Surge, NVIDIA Hits New Highs: Look to the Russell 2000
The NASDAQ Composite gained about 1.5%, with most of the gains made by semiconductor and tech stocks. NVIDIA (NASDAQ: NVDA), the largest component of the NASDAQ and the S&P 500, gained 2.25% to set a new high, putting its stock on track to hit $165 by year’s end based on the technical outlook. The Philadelphia Semiconductor (NASDAQ: SOXX) made a similar move, jumping more than 2.0% for the day on broad-based buying. However, the real action was in the small caps and the Russell 2000 (INDEXRUSSELL: RUT).
The Russell 2000 surged more than 5.75% in one day to hit a three-year high. The move confirms the sector rotation into small caps, which was hinted at earlier this year. The move looks strong and is technically healthy, with the stochastic and MACD bullish, showing an engaged market ready to run with ample room to move higher. Leading names within the index gained an average of 35%, including FARO Technology (NASDAQ: FARO), Wolverine Worldwide (NYSE: WWW), IonQ (NYSE: IONQ), and Freyr Battery (NYSE: FREY). The next move in the RUT index will likely take it up to retest for resistance at the all-time high. A move above that level opens the door to a substantial rally, extending long-term trends that could take it above 3,000 by the end of Trump’s term.
The Top 3 Russell 2000 Stocks to Buy Now
Faro Technologies: 3D Measurement Leader Facing Macro Headwinds
Faro Technologies is a software company focusing on 3D measurement and imaging. Results in 2024 include business contraction due to macroeconomic headwinds, but growth is forecast for next year.
The consensus target reported by MarketBeat suggests a slim 3.9% top-line advance that likely underestimates the rebound due to the tailwinds likely to develop as the year progresses.
Analysts rate the stock with a consensus of Buy, and see it moving to the $28-$30 range.
Wolverine Worldwide: Iconic Shoe Brands Facing Shifting Consumer Trends
Wolverine Worldwide is a shoe manufacturer and retailer with a portfolio of iconic brands, including Merril, Saucony, Stride Rite, and Hush Puppies.
The 2024 results include significant business contraction related to shifting consumer trends; consumers are more likely to wear out their shoes when financial conditions are tighter but will splurge on numerous new pairs when they improve.
The outlook for Wolverine’s 2025 is for revenue to resume growth, advancing by a slim 5% compounded by wider margin. Earnings growth is expected to be accelerated at nearly 50%. Until then, the 2024 cash flow and balance sheet can sustain the dividend. The analysts’ consensus price target lags the price action in WWW shares but is rising following a shift in sentiment. The analysts began lifting the ratings and price target in 2024, improving the consensus sentiment to Moderate Buy from Hold and price target by 50%, a trend likely to continue in 2025.
IonQ: A Leader in Quantum Computing Solutions
IonQ Inc. makes and services the quantum computing industry.
Its products are sold through a cloud-based network and have begun to see demand.
The 2024 results include growth accelerating to 100%, with a forecast for 100% growth in 2025.
The company is yet to be profitable, with only $10 million in quarterly revenue in Q3, but that is expected in time.
Continued advancements in quantum technology and increased partnerships are likely to fuel IonQ's revenue growth, positioning it as a potential leader in the emerging quantum market. 
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