Amazon.com (AMZN) shares found support from a combination of trendlines over the last week that forecasts higher prices into 2025.
The online retailing, cloud computing, AI stock has been the relative strength leader of the Magnificent Seven for the last month as the “other six” – except for Tesla - have languished in a trading range for more than a month.
Historically, Amazon shares post a strong fourth quarter run that maintains its strength through the first quarter of each year. This sets the stock as a standout from the rest of the large cap technology names that normally see dramatic weakness during the first two months of the year.
Investors should consider a short-term price target of $225 with a strong trend in both the 50- and 200-day moving average for Amazon stock in place.
From there, the long-term price target focuses on a $250 print over the next 3-6 months.
Rocket Companies (RKT) has been on a rough road since the company’s price peaked above $21 two months ago, but there’s good reason to hold out on this bullish play on the housing industry.
Shares of Rocket drove higher through the summer as investors anticipated lower rates from the Fed would come sooner. That anticipation turned to disappointment in September when Jerome Powell made it clear that the Fed would be less aggressive in the second half of 2024.
But the rate outlook for 2025 remains dovish as the Fed is expected to drop rates by 1.5%, and that’s before we see pressure from the Trump Administration to push them even lower.
Housing stocks are set to tally on the news as sales should increase in 2024, taking shares of Rocket Companies with them.
Rocket just reported revenue growth of -46% on November 12. The drop in revenue was due to comparisons to strong numbers in the previous year and the prolonged wait on lower interest rates. Both should clear over the next six month.
Rocket shares formed a long-term technical bottom at $14 just two weeks ago. That price is just above the stock’s 20-month moving average. The 20-month serves as the “line of demarcation” between a long-term bull or bear market trend for a stock.
Volume has started to increase as investors suspect the worst is behind Rocket Companies, including some Wall Street analysts.
Last week, analysts from Bank of America upgraded their price target on the stock after its recent 35% decline.
Investors should target a bullish move back to Rocket Companies’ $22 price level.
Archer Aviation Inc. (ACHR) shares are flying higher as the company has now made its way onto Wall Street’s radar screen.
Archer is a developmental company in the electric vertical takeoff and landing (eVTOL) industry.
These innovative vehicles are designed to revolutionize urban air mobility, offering a sustainable and efficient transportation alternative. The company’s approach combines advanced aeronautics with cutting-edge electric propulsion technologies.
Archer’s goal is to reduce urban congestion and contribute to environmental sustainability with both private and commercial vehicles.
Just over a month ago, The FAA issued its final rules on the classification of "powered-lift" vehicles, including electric vertical takeoff and landing (eVTOL) aircraft like those developed by Archer Aviation, on October 22, 2024.
That designation by the FAA instantly put shares of Archer on Wall Street’s radar screen as potentially being the next Tesla.
Since then, Archer has become the target of speculators, driving the stock into a parabolic rally.
Adding to the volatile move was the announcement that Cathie Wood’s ARK Innovation fund had sold positions in Telsa and bought shares of Archer Aviation.
Shares of Archer are trading just below $10 and likely to break through that psychologically significant level this week.
Stocks that move above $10 often see a sharp increase in institutional activity as a number of institutions and mutual funds are restricted from buying shares under the $10 price.
Investors should continue this rally on Arch Aviation to continue, targeting a move to $20.
A theme that is growing more and more common, almost dire, is the need for Power.
Last quarter’s move by several AI companies to put together agreements for dedicated power sources for data centers put the spotlight on where to expect the utility trade to move in 2025.
American Electric Power (AEP) is part of the group to watch.
Last week, Indiana Michigan Power (I&M), a subsidiary of American Electric Power (AEP), reached a joint settlement with several key stakeholders including the Indiana Office of Utility Consumer Counselor, tech giants Amazon Web Services (AMZN), Microsoft (MSFT), and Google (GOOG), as well as the Data Center Coalition and the Citizens Action Coalition.
The settlement emerges from comprehensive negotiations aimed at enhancing I&M’s service quality across the board.
It supports the company’s initiatives in fostering regional economic growth, particularly through accommodating the power demands from new data centers in northeast Indiana and potential future large customers, ensuring that reliable and affordable service remains accessible to all customers.
American Electric Power (AEP) operates the Donald C. Cook Nuclear Plant, in Bridgman, Michigan.
This facility has two nuclear reactors and contributes significantly to the electricity supply in the region.
AEP and other nuclear operators are positioned to commoditize nuclear energy sources for the AI industry, starting in 2025. This shifts AEP from an income stock to an attractive “growth and income” stock with its yield of 3.72%.
Investors should expect a 20% gain from AEP shares with a price target of $120.
Shares of “big box” retailer Target (TGT) had a good week of trading last week as shares rallied 10% from their post-earnings bottom, but investors should be warried of the stock moving forward.
Shares of Target took a steep 20% decline in the wake of the company’s earnings report last week.
The company’s earnings report missed on both the top line revenue and bottom-line earnings per share.
Investors were further disappointed that Target’s management guided their 2025 growth lower than Wall Street’s targets.
In a prefabricated move, most Wall Street analysts defended Target’s stock during its 20% decline, even though the company had lowered their expectations for 2025.
One analyst outfit, Telsey Advisory Group, downgraded the stock noting the company was taking steps to reconnect with their customers, but that it would take time.
Time is the enemy of retailers as they manage their costly inventories to keep up with seasonal trends.
Last week’s short-term buying was a reaction to Wall Street’s defending of the stock.
Given that, Target shares are likely to see last week’s rally turn into nothing more than a “dead cat bounce” with the stock moving back below $120 on their way to a target of $100.
