HypeIndex weekly review as the Nasdaq 100 slips by 1.84%

American equities were mixed this week as the market reflected on the dovish statement by Jerome Powell, the head of the Federal Reserve at the Jackson Hole Symposium. In that speech, he noted that the bank was ready to change its policy, pointing to a potential cut in its September meeting.

The biggest catalyst in the market this week was Nvidia’s earnings, which showed that there was still demand for artificial intelligence (AI) semiconductors. Its revenue jumped by 122% in the second quarter to over $30 billion, higher than what the company made in the whole of 2021. 

The S&P 500 index dropped by 0.66% while the Nasdaq 100 fell by 1.84%. The Dow Jones, on the other hand, rose by 0.17% as investors moved to value stocks. 

Alibaba (NYSE: BABA)

Background

Alibaba is one of the leading technology companies in China with a market cap of over $195 billion. It is the 7th-biggest firm in the country after Tencent, ICBC, Kweichow Moutai, PetroChina, Agricultural Bank of China, and China Mobile. 

Alibaba stock has dropped sharply in the past five years as the company has faced numerous regulatory challenges and competition from JD and PDD Holdings.

Summary

Alibaba stock rose by over 2% this week after the company published encouraging results and continued with its share repurchase program. Its revenue rose by 4% in the last quarter while its net income rose to $3.3 billion.

Alibaba is often compared with Amazon because the two are giant players in the e-commerce and cloud computing business. As such, most analysts believe that it is a highly undervalued company, mostly because it has slower growth figures and geopolitical risks. It has a P/E ratio of 13 while Amazon has 41.

• Review date: 26th August

• Hype change: 73%

• Price change: -1.46%

• Sentiment: POSITIVE

Peloton Interactive (NASDAQ: PTON)

Background 

Peloton Interactive is a company at the intersection of technology and fitness. It sells treadmills and exercise bikes, and then offers a streaming platform. Peloton has been a highly embattled company in the past few years as its growth slowed and its inventories rose. As a result, its stock has dropped by over 80% from its all-time high.

Summary

Peloton stock has done well in the past few weeks, rising by over 50% from its lowest point this month. This recovery accelerated after the company published encouraging financial results and transitioned from growth to profitability. It narrowed its loss from over $241 million in Q2’23 to $30.5 million.

With improving results, analysts believe that the company could become an acquisition target as interest rates start falling. The argument would be that Peloton can transform into the biggest fitness software company.

• Review date: 27th August

• Hype change: 200%

• Price change: -6.8%

• Sentiment: POSITIVE

JD.com (NASDAQ: JD)

Background

JD.com is one of the top players in the e-commerce industry in China with millions of active shoppers. Unlike PDD Holdings and Alibaba, JD is primarily a domestic company with no major international operations. 

Summary

JD shares have risen in the past few weeks even after it published mild financial results. This rally happened because the company initiated a $5 billion share repurchase program. Share repurchases create value for investors by boosting the earnings per share. 

They also boost confidence among investors by showing that the management believes that the company is undervalued. Looking at JD’s numbers, there are signs that it is, indeed, an undervalued company since it has over $27.7 billion in debt and just $7 billion in debt. 

A key risk for the company is that Walmart, a long-term investor has started to sell the stock.

• Review date: 28th August

• Hype change: 257%

• Price change: 1.5%

• Sentiment: POSITIVE

Ulta Beauty (NYSE: ULTA)

Background

Ulta Beauty is a leading retailer that specializes on beauty products in the US. It runs over 3,000 stores and sells thousands of products. Over the years, it has also become one of the top e-commerce players in the country.

However, its business has come under pressure as more customers shop in places like Amazon, Walmart, and newer brands like Kylie Cosmetics and Fenty Beauty.

Summary

Ulta Beauty’s hype rose this month after Warren Buffett bought shares. However, its stock retreated after publishing weak results on Thursday. Its net sales rose to $2.55 billion while its comparable store sales fell by 1.2%. The company also lowered its forward guidance for the year.

Still, Ulta Beauty is seen as an undervalued company that has the biggest market share in its industry. It is also an acquisition target by large companies that want a bigger exposure in the beauty industry.

• Review date: 29th August

• Hype change: 232%

• Price change: -4.3%

• Sentiment: POSITIVE

If you’d like to receive more trending stocks straight to your inbox, check out our premium plans. Alternatively, if you’d like to hear more about the services offered by HypeIndex, you can check out our FAQ page.

HypeIndex is an AI platform that detects Hype in stocks and cryptos before it moves the market, providing reliable early detection for profitable investment opportunities.

The algorithm for our proprietary HypeIndex score is based on sentiment analysis, data science and machine learning.