Ticker Reports for January 8th
Moderna Shares Spike on H5N1 News—What's Next for Investors?
Shares of Moderna Inc. (NASDAQ: MRNA) surged over 12% after news of the first confirmed death from the H5N1 bird flu in the United States. At one point, the stock had climbed over 14% before returning late in the trading session. However, the stock retreated after hours, trading at $47.53, and has since declined further.
Whenever a stock makes a sharp move on news like this, investors need to take a deep breath before making any investment decisions. In this case, the move in MRNA stock is mostly reactionary. Short interest is around 11%, so any surge in buying would trigger some short covering.
Which isn’t to say there’s no correlation. The company did receive a $176 million grant from the U.S. Biomedical Advanced Research and Development Authority (BARDA) in 2023 to create an updated mRNA vaccine for the H5N12 virus. That virus is currently in early-stage testing. Nevertheless, that’s all speculative investors needed to try to burn short positions, but it may not be enough to sustain a rally.
Is Moderna One of the Best Stocks of 2025?
Despite a consensus Hold rating from the Moderna analyst forecasts on MarketBeat, Barron’s recently put Moderna on its list of stocks to watch in 2025. Analysts are encouraged by the breadth of the Moderna pipeline.
In total, the company is forecasting to have approvals on 10 new vaccines in the next three years. That includes three candidates that it plans to launch in 2025.
In addition to treating respiratory viruses, Moderna has a partnership with Merck & Co. (NYSE: MRK) to develop cancer vaccines. This is a way for Moderna to take a seat at the table of personalized medicine. The company’s most advanced candidate is V940-Keytruda, which entered Phase III trials in 2024. The vaccine is pursuing indications for melanoma, NSCLC, and specific refractory lung cancers.
For its part in the partnership, Moderna is trying to identify genetic mutations in a patient’s tumor cells, then developing and administering a unique mRNA INT for each patient. The idea is that each INT (Iodonitrotetrazolium), which is a chemical compound, will be specific to every patient and activate their immune system to fight their specific cancer cells.
Under the terms of the partnership, Moderna received a $250 million upfront payment from Merck. The two companies are splitting the development costs and will share the profits or losses equally if the vaccine reaches commercial status.
Making the Numbers Add Up
The significance that the additional revenue from new vaccines could provide is hard to understate. Currently, Moderna generates approximately $3 billion on the top line every year. It also has a $9 billion cash balance. That’s more than some biotech companies generate, even those with products in the market.
Understandably, the bulk of that revenue comes in the company’s third and fourth quarters, which correlate with flu season in the Northern Hemisphere. As an example of that, Moderna reported $1.9 billion in revenue in its November earnings report. That brought the total for the first three quarters of 2024 to $2.2 billion.
However, the concern has been the company’s R&D spending, which Moderna revised downward but will still be around $4.7 billion annually. The spending on R&D was fueled by the outsized profits it earned from its COVID-19 vaccine.
But those funds have dried up. Which means the company is not profitable. And that explains why MRNA stock dropped over 60% in 2024, making it not only one of the worst-performing medical stocks but one of the worst-performing stocks of 2024 in all sectors.
Sell This News and Wait for More
With the company's fourth-quarter earnings report not due until February, it's not surprising to see traders taking profits on this bump in MRNA stock.
But that’s when the real opportunity may arise. Investors will be waiting for updates on the company’s pipeline.
The analyst forecasts on MarketBeat have a consensus price target of $79.50 on MRNA stock. That gives the stock nearly 77% upside from the closing price on January 7. However, opinion around the stock has been mixed, which clearly means that not all analysts are bullish on Moderna’s prospects.
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Nebius Group (NBIS): A Small-Cap Backed by NVIDIA
Several small and mid-cap companies have captured investor attention over the previous year thanks to NVIDIA’s (NASDAQ: NVDA) disclosed investments in these firms. One recent standout is Nebius Group (NASDAQ: NBIS), a technology company now drawing comparisons to other NVIDIA-backed successes like SoundHound AI (NASDAQ: SOUN), which surged over 800% in the past year.
Despite this connection, Nebius has faced challenges, with its stock down almost 20% from its 52-week high in December. But does NVIDIA’s involvement signal a buying opportunity? Let’s dive deeper.
What Is Nebius Group?
Nebius Group N.V. is a Netherlands-based technology company specializing in AI-driven solutions for businesses and consumers. Its flagship offerings include Nebius AI, a cloud platform designed for AI deployment and machine learning; Toloka AI, which focuses on generative AI applications like model training and data generation; Avride, a provider of autonomous vehicle solutions for logistics and ride-hailing; and TripleTen, an EdTech platform that equips learners with STEM and tech skills.
Previously known as Yandex N.V., the company underwent a transformation following sanctions imposed on Russia after its invasion of Ukraine. Yandex divested its non-Russian assets, leading to Nebius’s independence and subsequent Nasdaq listing in October 2024.
Following its debut, Nebius raised $700 million through a private placement involving NVIDIA and Accel Ventures.
Why Is NVIDIA Interested?
NVIDIA’s investment aligns with Nebius’s strong growth trajectory and its focus on AI infrastructure. In Q3 2024, Nebius reported revenue of $43.3 million, an almost 200% increase compared to the previous quarter. The AI infrastructure segment demonstrated exceptional growth, expanding nearly 300% quarter-on-quarter and almost 650% year-on-year, showcasing the company's rapid advancements in its core AI offerings.
The AI cloud business is on track to hit an annualized run rate of $120 million, while forward guidance estimates revenues between $750 million and $1 billion by 2025.
Nebius’s strategic initiatives include expanding its data center footprint. It recently launched a GPU-equipped facility in Kansas City and plans to open another U.S. cluster by 2025, bolstering its AI infrastructure capabilities. With partnerships like its collaboration with Uber Technologies for autonomous vehicles, Nebius is leveraging its diverse portfolio to drive innovation.
The NVIDIA Factor and Citron’s Bullish Call
NVIDIA’s support has sparked optimism, further amplified by Citron Research’s endorsement of Nebius as a potential “AI Wall Street darling.” Citron sees parallels between Nebius and competitors like CoreWeave, projecting the stock could reach $60 per share, offering significant upside from current levels.
Nebius plans to invest $1 billion in AI infrastructure by 2025, focusing on renting capacity to enterprises scaling their AI operations. This capital commitment reflects its ambition to establish a strong foothold in the rapidly growing AI sector.
Why Nebius Is a Unique Play in AI Infrastructure
While NVIDIA’s backing and Citron’s bullish outlook are compelling, investing in Nebius involves risks. The company faces stiff competition from established players. However, its financial strength, bolstered by almost $2.3 billion in cash and rapid revenue growth, positions it as a high-potential opportunity for risk-tolerant investors.
The real potential also lies in Nebius’s ability to leverage its NVIDIA partnership to secure relationships with other industry leaders, such as Advanced Micro Devices (NASDAQ: AMD) and Magnificent Seven tech giants and cloud hyperscalers like Microsoft (NASDAQ: MSFT) and Amazon (NASDAQ: AMZN). If successful, Nebius could unlock significant long-term value and immense growth, making it a standout in the AI and tech scene.
Nebius Group offers a unique blend of opportunity and risk for investors seeking exposure to emerging AI infrastructure plays. NVIDIA’s involvement certainly adds an extra layer of intrigue.
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Natural Gas Demand to Surge: Top 3 Stocks and ETFs to Consider
The EIA expects LNG prices to average $3.00 in 2025, but the forecast may be low because of new projects coming online. Two projects, Plaquemines LNG Phase 1 and Cheniere’s Corpus Christi Phase 3, will account for at least 75% of the capacity coming online this year. Regardless, a $3.00 average is about 36% above the 2024 average, with U.S. exports forecasted to rise by 17%. The takeaway is that natural gas is reaching a critical mass, and U.S. LNG companies are well-positioned to benefit.
Cheniere: Growing and Building Leverage in 2025
Cheniere (NYSE: LNG) is the largest natural gas exporter in the U.S. and is expected to grow revenue by nearly 20% in 2025. The analysts tracked by MarketBeat also forecast solid earnings but expect a deep year-over-year decline due to capital spending projects, including the completion of Corpus Christie Phase 3. That impact will fade quickly, leaving the company with increased capacity and improved earnings to sustain its healthy balance sheet and capital returns.
The outlook for capital return from Cheniere is robust, including the dividend and share repurchases. The dividend yield isn’t large, about 0.9%, with shares trading near 18x earnings, but it is reliable, the distribution is expected to grow, and share repurchases are significant. Share repurchases reduced the average diluted count by 6.2% in Q3 and 5.6% for the first nine months of fiscal 2024. Regarding the balance sheet, the improving cash flow allows for debt reduction, leaving long-term debt leverage at 2.4x and equity up by 3.65%.
Analysts rate the stock as a Moderate Buy and are lifting their price targets for 2025. The consensus implies fair value near early January prices, but it has been up 35% in the last twelve months, with revisions leading to the $260 level. A move to $260 is worth 35% of upside from critical resistance levels.
High-Yield Kinder Morgan Rises on Forecasts
Kinder Morgan (NYSE: KMI) is well-positioned for 2025’s LNG boom as a middleman connecting the U.S. natural gas producers with the end markets, including export terminals. It operates roughly 79,000 miles of pipelines, liquefaction, storage, and distribution terminals to support them. Its revenue and earnings aren’t tied to the price of LNG so much as the volume of gas transported, which is rising. The volume is increasing because of the increased demand, acquisitions, and capital projects and is expected to continue rising for the next few years.
Analysts' sentiment is driving the price action in KMI stock higher. The consensus lags the market in early January, but it has been up more than 30% in the last twelve months, with revisions leading to the mid-$30s. A move to the mid-$30s is worth a 25% gain from the critical resistance target.
ETF Investors Should Turn to AMLP
ETF investors also have options. The Alerian MLP ETF (NYSEARCA: AMLP) targets the U.S. LNG middlemen and pays a high yield.
The dividend distribution is worth more than 7.5% at the start of 2025, with distributions and share buybacks expected to grow.
The technical action is also promising, with the stock trending higher. The price action in 2024 had the market testing resistance at a long-term high that is likely to break in early 2025.
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