Three Stocks: GE Aerospace, Spotify, and HashiCorp

GE Aerospace 

The combination of a positive earnings surprise and technical support have shares of GE Aerospace (GE) breaking above $160 into new all-time high territory.

This morning, the newly formed company released their first earnings report since spinning-off GE Vernova (GEV), the power generation arm of the old General Electric conglomerate. GE beat on their earnings per share (EPS) target and showed revenue that grew 18.1% year-over-year.

The stock had just found technical support at its 20-day moving average yesterday ahead of the report. That support combined with the report has shot the shares 7% higher today above $160.

The move above $160 is drawing new buyers into the stock as volume is heavier for the day.

The options market is seeing increasing activity in the May 17 $165 calls, with more than 1,500 contracts changing hands. The increase in call volume suggests that options traders are forecasting higher prices for GE.

The stock’s RSI indicator is nearing another overbought reading as it hovers just below 70.  Historically, this is an indication that a stock is going to “correct” or consolidate, But GE shares have been trading with so little volatility over the last four months that the stock can continue its ascent.

ge stock chart

Spotify

Shares of my favorite music streaming service are trading higher by 14% today.

Spotify (SPOT) released earnings results this morning that were $0.01 better than the Street’s expectations while growing the company’s revenue by 16% year-over-year. That revenue bump is an improvement from 10% year-over-year last quarter.

The beat was good news, but the company didn’t stop there, as it reported an increase in monthly active subscribers in both the advertising supported and subscription-based models. The market is reading that as a sign that next quarter’s results will build on this quarter’s success.

Wall Street is weighing-in on the earnings news with price target upgrades that reach as high as $400 from its current price of $288.

Shares bounced from strong support at their 50-day moving average this week and are now trading back above $300 with a short-term trading target of $325.

From there, I expect to see a consolidation as volatility settles before Spotify stock’s next move to my target of $350.

spot stock chart

HashiCorp

HashiCorp (HCP) shares surged more than 20% - to $30 - this morning on headlines that the company is set to be acquired by IBM (IBM).

The company is a cloud and cloud security firm with a $6 billion market cap compared to IBM’s $168 billion value. IBM shares are also trading higher on news of the acquisition.

Over the last year, HashiCorp has increased revenue by more than 20%, while IBM is still posting single-digit growth on its own. The potential move may be part of IBM’s acceleration into cloud computing and AI services as the perennial IT service company has indicated over the last year.

Shares of HashiCorp are likely to remain at or near $30 until a deal has been announced. If no deal materializes over the next week, you can expect HCP shares to drop to support at $26.

IBM’s earnings are slated for tomorrow, April 24, which would likely include an announcement of the acquisition and be the reason for the news release today.

hcp stock chart

About the Author

Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.

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