Ticker Reports for January 23rd
Market Momentum: 3 Stocks Poised for Significant Breakouts
After a slow start to the year, U.S. equities have surged to new record highs following President Trump’s inauguration. By Wednesday’s close, the SPDR S&P 500 ETF Trust (NYSE: SPY) had gained over 4% for the week, bringing its year-to-date (YTD) return to an impressive 3.47%. This rally has been marked by unusually strong market breadth, with stocks from various sectors, including retail, communication services, and energy, showing positive momentum.
The current rally appears more balanced than in prior years when the so-called Magnificent Seven largely dominated market performance and breadth.
So, let’s look at three stocks from three different sectors that are on the verge of a breakout.
On Holding AG : Outpacing Its Sector
Despite an underperforming retail sector, as evidenced by the SPDR Retail ETF (NYSE: XRT) being down 0.55% YTD, On Holding AG (NYSE: ONON) has demonstrated impressive relative strength. The company, which designs and sells high-performance running footwear and apparel globally, has outpaced its sector by climbing almost 7% on the year as of Wednesday's close.
Following a pullback toward its rising 50-day simple moving average (SMA) earlier this month, On Holding broke out to new all-time highs on Tuesday. While it retreated slightly on Wednesday, the stock’s ability to reclaim and maintain support above $60 could signal further upside. This $60 level is quickly emerging as a crucial inflection point, and traders should pay close attention to it going forward.
Analysts are bullish on the stock, with a consensus Moderate Buy rating and price target that forecasts the potential for additional upside. Morgan Stanley recently boosted its price target for the stock from $62 to $65, citing its strong gross margins and potential for sales growth acceleration. With the retail sector underperforming, On Holding’s resilience and upward trajectory make it a standout name.
Reddit Inc: New All-Time Highs and Continued Momentum
Reddit Inc.(NYSE: RDDT), known for its digital communities, such as the infamous WallStreetBets, has achieved fresh all-time highs this week. After consolidating above previous resistance at $160, Reddit turned this level into firm support over the past two months. On Tuesday, the stock surged above $180, confirming a breakout to new highs.
Technically, maintaining $180 from now on as support will be critical for Reddit’s continued upward momentum. However, the stock’s lofty valuation, with a forward P/E ratio of 222, might suggest some caution. Despite this, sentiment remains optimistic, with analysts assigning a Moderate Buy rating. Out of 21 analysts, most maintain favorable outlooks, though the consensus price target is approximately 14% below Wednesday’s closing price.
Traders should also monitor Reddit’s upcoming Q4 earnings report, scheduled for February 12. This event could be a significant catalyst, potentially sustaining or disrupting the stock’s current bullish trajectory.
Broadcom Inc: Positioned for a Bullish Breakout
Semiconductor giant Broadcom Inc. (NASDAQ: AVGO), a technology company renowned for its global presence in designing and developing semiconductor and infrastructure software solutions, is currently in a significant bullish consolidation near its all-time high. This movement coincides with the Trump administration and tech giants like Oracle, Microsoft, and OpenAI, announcing the formation of a new company named Stargate. This venture aims to bolster artificial intelligence infrastructure in the United States with an initial investment of $100 billion, with plans to increase this to up to $500 billion in the coming years.
Following this announcement, the Semiconductor ETF (NASDAQ: SMH) broke out from a prolonged consolidation phase, while several semiconductor stocks saw substantial upward momentum on Wednesday. AVGO, which previously broke out after stellar earnings in December, has been consolidating near its peak in a bullish pattern.
Should AVGO surpass the short-term resistance of $247, it might signal the start of another significant upward trend.
AVGO holds a Moderate Buy rating, echoing the sentiment of the above stocks. Recently, analysts from Barclays and Mizuho have also raised their price targets for the stock, reflecting optimism about its future performance.
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Momentum Builders: 3 Stocks Positioned to Shine This Quarter
Now that the first quarter of the new year is underway, investors might look for the best potential plays in the stock market. Having the confidence and financial momentum to start the year can give portfolios the room—and safety—to look for exposure to the more aggressive growth plays later in the year. But in order to get there, this strong start to the year needs to be locked in.
Therefore, in order to get portfolios in that position, today’s list will be paramount for investors to consider for the first quarter. However, these are not the most popular names out there, and that is precisely where the underlying upside will come from, as the fundamental setups and risk-to-reward setups make these stocks some of the best picks in the transportation and industrial sectors.
Once investors actually connect the dots in the big picture for shares of Knight-Swift Transportation Inc. (NYSE: KNX), the real estate investment trust (REIT) connection to the sector through Prologis Inc. (NYSE: PLD), and even the clean energy player in the energy sector in NextEra Energy Inc. (NYSE: NEE), the entire fundamental thesis behind today’s economy will lead them directly to the double-digit upside inside this list.
Business Activity Boosts Lead to Knight-Swift Stock
Now that the economy is starting to shift into a manufacturing-friendly environment, with the manufacturing PMI already showing investors a sudden surge in new orders and positive commentary from different industries, the view has turned positive for the industries that support domestic business activity.
For example, transportation, as raw materials and finished goods are being transported, will create a significant demand tailwind for these operators to potentially see stronger profits in the coming months. If price action is any indication, investors already have a pillar of strength to account for in favor of Knight-Swift stock today.
As it trades at 91% of its 52-week high, investors can safely assume that the market favors this stock for the reasons already mentioned. This might also explain why some Wall Street analysts have decided to reiterate their optimism in Knight-Swift stock today.
Those at Susquehanna have placed a positive rating on this stock, this time valuing it as high as $67 a share to call for up to 21.4% upside from where the stock trades today, not to mention a new 52-week high. This also explains why allocators from Principal Financial Group also decided to boot their holdings by 21.5% as of January 2025 for a net position of $35.2 million today.
Prologis Stock: Next in Line
While Knight-Swift will handle the transportation responsibilities for this surge in business activity, Prologis will serve as the intermediary, focusing on logistics planning and storage networks. This is why the broader market is also willing to pay a price-to-earnings (P/E) ratio of 34.3x today, a premium over the finance sector’s average 24.8x valuation.
Some will call this an expensive valuation and, therefore, unattractive. Others will realize that the market is always willing to pay a premium for stocks it expects to outperform its peers in the coming months. Knowing that the value chain, which already favors Knight-Swift, will fall into Prologis stock, new buyers have come around recently.
As of January 2025, a new institutional allocation from Sarasin & Partners boosted the group’s holdings by 0.3%. While this may not sound like much on a percentage basis, it brought the net position to a high of $99 million today and gave investors another bullish factor to consider in their decision-making.
Another benefit of owning this stock is the strong and stable cash flow it generates, which allows it to pay shareholders up to $3.84 a share in dividends, translating to an annualized dividend yield of up to 3.3% today.
Oil Price Rallies Call for Clean Energy
Low oil prices give very little incentive for consumers and businesses alike to look for alternative energy sources, which is why NextEra stock has traded down to 80% of its 52-week high. However, as business activity surges, demand for oil is also expected to rise under the most likely scenarios.
This is a view shared by analysts at Goldman Sachs inside their 2025 macro outlook report, as well as hedge funds who have accumulated oil futures inventory lately. Connecting the dots in this last leg of the economic tailwind led Scotiabank analysts to reiterate a sector outperform rating as of December 2024.
Not only that, the reiteration came with a valuation of up to $96 a share for Prologis stock, which would imply a net upside potential of as much as 35.5% from where the stock sits today. Understanding and accepting this potential upside led buyers from Bartlett & Co. to accumulate up to $55.9 million worth of NextEra socks to start the year.
These factors give investors a chance to get their first quarter started on the right foot, a factor that institutions have already gotten behind on.
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Supercharge Your Portfolio With These 3 Key Stocks
The stock market is focused on the potential impacts of a new United States administration in the financial and business scene. For good reason, investors should start looking into potential plays that can be made in the coming months to supercharge their portfolio performance during 2025. To align their portfolios with this sort of upside, a couple of things need to be set in place.
First and foremost, given the currently high index valuations in the S&P 500 according to Goldman Sachs and its 2025 macro outlook report, a more favorable risk-to-reward setting needs to be present in individual stocks selected by investors moving forward. Apart from a favorable setup, these companies need to showcase a fundamental tailwind behind them to justify higher prices soon.
Today’s list fits both of these requirements, as stock prices trade low enough to give investors a favorable risk-to-reward setup as well as plenty of tailwinds behind the bullish cases present today. Stocks like Nike Inc. (NYSE: NKE), Advanced Micro Devices Inc. (NASDAQ: AMD), and even Alibaba Group (NYSE: BABA) could act to supercharge portfolios this 2025 while also diversifying across different sectors of the economy.
Nike’s Discount: A Grab Opportunity for Wall Street
Now that Nike trades at only 67% of its 52-week high price, it has recently become the subject of much of the value investing community’s attention. Surely the markets have a reason for beating this stock to such lows, and it can be connected to the premium in the dollar index today.
Considering that Nike is a significant international brand, overseas sales are expected to take a break and keep declining as long as the dollar is as strong as it is today. This is because foreign currencies and buyers have relatively lower buying power to buy American goods such as Nike products.
With this in mind, the company has to rely more and more on domestic consumption, which hasn’t been all that strong lately as consumer credit tightens due to rising living costs. However, there is a shift from Morgan Stanley analysts that might turn this story on its head.
These analysts now see a decline in the dollar, which would significantly boost Nike’s international sales while cushioning the domestic down cycle. This might be why Bill Ackman decided to buy a stake of over $230 million worth of Nike stock in recent quarters.
With a recent price target boost to $90 a share on Nike stock, alongside an overweight rating, Piper Sandler analysts see a 25% upside in the company as of January 2025. This name clearly fits the favorable risk-to-reward criteria investors need today.
Advanced Micro Devices: The Semiconductor Outlier
The days of NVIDIA Co. (NASDAQ: NVDA) being the king of the technology sector are fading. Now markets might look deeper into the fundamental setups in the peer group to figure out which stocks really deserve to trade at premium valuations.
Driven by a discount of up to 54% of its 52-week high, Advanced Micro Devices stock offers an attractive gap to be filled next to NVIDIA stock’s 91% of its 52-week high. Acting as a catalyst to fill this gap is the Wall Street analyst forecasts for up to $4.88 in earnings per share (EPS) for 2025, meaning a boost of 62.6% from 2024 levels.
On the other hand, NVIDIA analysts forecast EPS of $2.94 for 2025, implying a growth rate of only 12.2% to fall significantly below Advanced Micro Devices' forecasts. Since EPS typically drives stock valuations, investors have a relatively attractive setup to take advantage of in this stock today.
Knowing this, analysts have also placed a consensus price target of $177.7 on Advanced Micro Devices stock, calling for up to 45.5% upside from today’s discount.
Chinese Stocks to Rally in 2025
Following the same thesis behind Nike’s potential rally, a lower dollar will also boost emerging markets and other overseas stocks. With China being the center of negative media today, investors seeking value will likely call the bluff on this pessimism.
Some already have, such as David Tepper and Michael Burry, after they made Alibaba stock the largest holding in their respective funds. It would be no surprise for investors to see Citigroup analysts boost Alibaba stock to a buy rating alongside a $138 a share price target, calling for a net rally of up to 62% from where it trades today.
Today, that price looks more like 72% of the stock’s 52-week high, so the potential downside might already be priced into the quote today. This would, of course, leave investors with the sort of risk-to-reward setups that will likely act to supercharge their portfolios this 2025.
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