Trump Media & Technology (DJT) stock took a sharp dive today, falling over 10%.
With a trading volume of 61.4 million shares, nearly three times its 90-day average of 21.3 million, the stock’s volatility shows no sign of cooling down.
After rocketing over 230% in the past month, today's sell-off highlights just how much of DJT’s price movement is fueled by retail speculation rather than any solid business fundamentals.
At its core, DJT represents the epitome of a “meme stock.”
The initial surge in its value was less about financial health and more about the Trump brand’s magnetic pull among certain retail investors.
The stock has been heavily influenced by Trump’s political ambitions and speculation that a Trump presidential win would benefit the platform.
However, Truth Social has yet to demonstrate a sustainable revenue model. In fact, recent financials have shown mounting losses, with the company burning through cash without any clear path to profitability.
The idea that Elon Musk might acquire or merge Truth Social with his own social media platform, X, adds a speculative twist.
Yet, even that rumor remains unfounded...
Acquiring a loss-making company with limited user traction isn’t exactly Musk’s style, especially as he continues to focus on X's integration efforts and monetization challenges. Moreover, the logistics of merging two distinct platforms, especially when one is politically charged, would be a massive undertaking with no guarantee of success.
A prudent investor should approach DJT with caution.
The stock’s meteoric rise, fueled by political sentiment and rumors, makes it highly volatile and disconnected from any traditional valuation metrics.
If you’re not looking for a high-stakes gamble, DJT is probably one to avoid.
Intel Corporation (INTC) enjoyed a strong boost, climbing 7% today, supported by a hefty trading volume of 121.6 million shares—well above its 90-day average of 74.6 million.
This spike followed Intel’s Q3 earnings report, which came in slightly above revenue expectations but showed a net loss of $0.46 per share, missing analyst projections of a $0.02 loss.
Intel’s earnings beat on revenue doesn’t entirely mask the red flags in its report.
Revenue for the quarter stood at $13.28 billion, a 6% year-over-year decline.
Most of Intel's revenue continues to stem from its Client Computing Group ($7.3 billion) and Data Center and Artificial Intelligence (AI) segment ($3.3 billion).
However, these segments were essentially flat, whereas competitors like Nvidia (NVDA) and AMD (AMD) have been posting impressive growth, particularly in AI-driven areas.
Intel is clearly aware of these challenges.
CEO Pat Gelsinger announced a $10 billion cost reduction plan, aimed at cutting headcount, reducing operating expenses, and restructuring capital expenditures.
However, Bank of America analysts remain skeptical, noting that while Intel’s reorganization may provide short-term relief, it doesn’t address the broader strategic issues Intel faces.
The company’s ambitious AI strategy has yet to yield concrete results, and its Gaudi AI chips, initially expected to contribute $500 million in 2024 revenue, have underperformed. Competitors like Nvidia are far ahead, reporting exponential growth in AI-related revenue.
The BofA analysts also highlighted Intel’s reliance on Taiwan Semiconductor (TSM) for manufacturing—an arrangement that they believe could continue to expand over the next several quarters, signaling Intel's ongoing struggles with its own manufacturing processes.
Additionally, Intel’s forecast for 2025—3% to 5% growth—falls short of market expectations, which anticipated closer to 7% to 8%.
Intel may look appealing for short-term gains, especially with the stock trading up today.
However, the company’s lag in the AI sector, coupled with challenges in manufacturing and mixed earnings results, suggests caution. Intel is a legacy player trying to pivot, but without a stronger foothold in AI, its growth prospects may remain limited.
Globalstar (GSAT) surged 40% today with an extraordinary trading volume of 179.9 million shares—remarkably higher than its 90-day average of just 4.4 million shares.
This surge followed the announcement of an expanded partnership with Apple (AAPL), which involves new investments in Globalstar's satellite infrastructure.
On paper, Globalstar’s expanded deal with Apple sounds like a promising leap forward.
Apple has committed to a $1.1 billion investment to help fund Globalstar’s new Mobile Satellite Services (MSS) network, adding to its preexisting relationship that facilitates the iPhone's Emergency SOS feature.
In addition, Apple will acquire a 20% equity stake in a Globalstar subsidiary through the purchase of 400,000 Class B units, valued at $400 million.
However, beneath the surface, the deal is more complex.
A significant portion of Apple’s investment will go toward paying down Globalstar’s existing debt, rather than fueling growth.
Furthermore, Apple’s control over 85% of Globalstar’s network capacity essentially makes the company an extension of Apple’s communication infrastructure.
This dependency raises critical questions about its growth potential—especially given that it now has limited bandwidth to offer services outside of Apple’s needs.
From an investor’s perspective, Globalstar’s reliance on Apple could be both a blessing and a curse.
While Apple’s backing provides financial stability and a degree of operational security, it also caps the firm's ability to expand independently.
In essence, the company’s growth is largely tied to Apple’s usage requirements, with limited room to diversify its revenue streams.
Today’s spike in Globalstar’s stock price is a clear response to Apple’s investment, but it doesn’t necessarily translate to long-term growth potential.
With so much of its resources tied to Apple, and a large portion of the funds allocated to debt repayment, Globalstar’s future might be more constrained than today’s numbers suggest.
For those looking at this stock, a bearish position, such as buying puts, could be a way to capitalize on its potentially overhyped valuation.
