CryptoCurrency
A New Risk Just Emerged for the Stock
It’s been a very difficult year for Walgreens Boots Alliance (NASDAQ: WBA), which has seen its stock lose two-thirds of its value this year. The company has fallen victim to consistent drops in drug reimbursement payments from insurance providers over the years, a poor acquisition, and a cost-conscious consumer.
Now a new threat to the company has emerged: Amazon (NASDAQ: AMZN).
The Amazon threat
The pharmacy business has long been considered e-commerce-proof. While there have been mail-order and e-commerce pharmacies for quite some time, catering to people with predictable prescription refills, many patients need their medicine immediately, not in a few days.
However, Amazon is now looking to turn the industry on its head by rapidly expanding its same-day pharmacy services. Amazon began its e-commerce pharmacy service in 2020 and started testing same-day delivery in a few select cities last October. It expanded to the greater Los Angeles area and New York City in March and now has ambitious plans for 2025.
The e-commerce giant now plans to offer same-day pharmacy services in 20 more cities next year, including Boston, Dallas, Minneapolis, Philadelphia, and San Diego, among others. The move is expected to help the company provide same-day pharmacy delivery to nearly half the U.S. by the end of next year.
Amazon said that for orders placed by 4 p.m., customers will be able to get their medications delivered to them by 10 p.m. the same day. In addition, delivery is free for Prime members. Amazon has even been testing delivering medicine by drones in College Station, Texas, which is home to Texas A&M University.
Amazon’s aggressive push into same-day pharmacy delivery comes at a bad time for Walgreens, which recently announced that it could close a quarter of its stores. The move should ultimately be addition by subtraction for Walgreens. As it closes unprofitable stores, the ones that remain open should see a boost as many customers move their scripts to new Walgreens locations. However, with nearby pharmacies closing, the lure of free same-day pharmacy delivery from Amazon could see customers instead opting for the convenience of not having to go to a pharmacy when they are sick.
For its part, Amazon said it was looking to capitalize on the growing number of “pharmacy deserts” that were being created by store closures.
What to do with Walgreens stock?
While Amazon’s same-day pharmacy delivery service is a new emerging threat, the biggest issue Walgreens continues to face is drug reimbursement pressures. Pharmacy benefit managers (PBMs) have created an untenable situation for pharmacies to the point where, in some instances, they lose money by filling certain prescriptions, including popular GLP-1 weight-loss drugs.
For its part, Walgreens is trying to convince PBMs to switch to a new cost-plus model, where pharmacies would be paid for the part they play in helping reduce inflationary pressures on drug prices and the services they provide. However, the company will need to convince the big three PBMs that this model will also benefit them as well.
For its part, the U.S. government has taken notice of what is going on in the PBM market. The Federal Trade Commission (FTC) recently sued the three big PBMs over their practices, which it says have inflated the cost of insulin prices. A verdict in the government’s favor could help the pharmacy industry by leading to improved transparency with PBMs and eliminating the practice of excluding certain drugs from PBM formularies.
At this point, Walgreens stock is trading at a very inexpensive valuation, with a forward price-to-earnings (P/E) of just over 4.5 times earnings based on this fiscal year’s analyst estimates and a similar enterprise value-to-EBITDA (earnings before interest, taxes, depreciation, and amortization) multiple. The latter metric takes into consideration its debt and removes non-cash items.
While the company continues to deal with reimbursement pressure and now has to deal with a new threat from Amazon offering same-day pharmacy services, I think the stock has the potential to rebound. The closing of unprofitable stores should still be a positive, as would disposing of its VillageMD investment, which has also been a drag on the company’s results.
Meanwhile, a favorable ruling by the government against PBMs has the potential to be a catalyst for the stock if they are forced to change their ways. As such, I’d view Walgreens stock as a potential speculative buy, despite the new Amazon threat adding to its list of risks.
Should you invest $1,000 in Walgreens Boots Alliance right now?
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Walgreens: A New Risk Just Emerged for the Stock was originally published by The Motley Fool
CryptoCurrency
Time to Hit Buy on These 2 Software Stocks, Says Daniel Ives
It’s no secret that tech stocks have been powering the market gains over the past few years, and software stocks were among the biggest drivers of this growth.
Multiple factors are propelling the software industry forward, such as the rapid advancement of AI technology, high demand for IT solutions, and the ongoing expansion of the global digital economy.
Wedbush tech expert Daniel Ives has been watching the tech industry, and his take on it points to continued strength supported by AI and cloud expansion.
“Solid enterprise spending, digital advertising rebound, and the AI Revolution will drive tech stocks higher into year-end in our view,” Ives opined. “We believe 70% of global workloads will be on the cloud by the end of 2025, up from less than 50% today.”
Keeping that in mind, Ives goes on to add that the time has come to hit buy on two software stocks. They may not be household names, but according to the TipRanks data, both stocks are Buy-rated – and Ives sees significantly more upside to each than the consensus on the Street. Let’s take a closer look.
Couchbase (BASE)
We’ll start with Couchbase, a modern database platform provider that offers users and developers everything they need to support a wide range of applications – from cloud, to edge, to AI. Couchbase bills itself as a one-stop-shop for data developers and architects, making its services available through its powerful database-as-a-service platform, Capella. Organizations using the service can quickly create applications and services that deliver premium customer experiences, giving top-end performance at affordable prices.
The Capella platform brings the popular as-a-service subscription model to the database industry. The company can support database services for a wide range of AI applications, including the latest gen-AI tech, as well as database search, mobile access, and analytic functions. Customers can also choose self-managed services through Couchbase’s servers, with on-premises management for both multicloud and community apps.
Couchbase’s database service has found success in a wide range of fields, including the gaming, healthcare, entertainment, retail, travel, and utility sectors. The company’s customer base includes such major names as Verizon, UPS, Walmart, Cisco, Comcast, GE, and PayPal.
Turning to the financial results, we see that Couchbase reported its fiscal 2Q25 figures at the start of last month. The top line of $51.6 million was up almost 20% year-over-year and came in just over the forecast, beating expectations by nearly a half-million dollars. At the bottom line, the company ran a net loss of 6 cents per share in non-GAAP measures, but that was 3 cents per share better than had been anticipated.
CryptoCurrency
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CryptoCurrency
1 Top Stock to Buy Hand Over Fist Before That Happens
2024 is turning out to be a solid year for the global semiconductor industry, driven by multiple catalysts. These include the booming demand for chips that can manage artificial intelligence (AI) workloads, a turnaround in the smartphone market’s fortunes, and a recovery in the personal computer (PC) market.
These factors explain why the global semiconductor industry’s revenue is expected to jump 16% in 2024 to $611.2 billion, according to World Semiconductor Trade Statistics (WSTS). That points toward a nice turnaround from last year, when the semiconductor industry’s revenue fell 8%. Even better, the semiconductor space is expected to keep growing in 2025 as well, with WSTS projecting a 12.5% increase in the industry’s earnings to $687.4 billion next year.
More specifically, WSTS predicts a whopping 25% increase in the memory market’s revenue in 2025 to $204.3 billion. As it turns out, memory is expected to be the fastest-growing semiconductor segment next year as well, following an estimated jump of almost 77% in this segment’s revenue in 2024.
There’s one company that could help investors tap this fast-growing niche of the semiconductor market next year: Micron Technology (NASDAQ: MU). Let’s look at the reasons why buying this semiconductor stock could turn out to be a smart move right now.
WSTS isn’t the only forecaster expecting the memory market to surge higher next year. Market research firm TrendForce estimates that the sales of dynamic random access memory (DRAM) could jump 51% in 2025, while the NAND flash storage market could clock 29% growth. Both these markets are expected to reach record highs next year.
The growth in these memory markets will be driven by a combination of strong demand and improved pricing. TrendForce is forecasting a 35% year-over-year increase in DRAM prices next year, driven by the increasing demand for high-bandwidth memory (HBM) that’s used in AI processors, as well as the growth in DRAM deployed in servers. Meanwhile, the growing demand for enterprise-class solid-state drives (SSDs) and the growth in smartphone storage will be tailwinds for the NAND flash market.
These positive trends explain why Micron is set to begin its new fiscal year on a bright note. The company’s revenue in fiscal 2024 (which ended on Aug. 29) increased 61% year over year to $25.1 billion. The company posted a non-GAAP (generally accepted accounting principles) profit of $1.30 per share, compared to a loss of $4.45 per share in fiscal 2023, driven by a big jump in its operating margin on account of recovering memory prices.
CryptoCurrency
A truly decentralized system would decentralize authority — Cardano exec
Cardano Foundation chief technology officer Giorgio Zinetti told Cointelegraph that centralized authority is good for speed, but decentralized governance would give long-term sustainability.
CryptoCurrency
Intel’s former CEO tried to buy Nvidia almost 2 decades ago
Tech pioneer Intel (INTC) has seemingly missed out on the artificial intelligence boom — and part of it can reportedly be traced back to a decision not to buy the chipmaker at the center of it all almost two decades ago.
Intel’s former chief executive Paul Otellini wanted to buy Nvidia in 2005 when the chipmaker was mostly known for making computer graphics chips, which some executives thought had potential for data centers, The New York Times (NYT) reported, citing unnamed people familiar with the matter. However, Intel’s board did not approve of the $20 billion acquisition — which would’ve been the company’s most expensive yet — and Otellini dropped the effort, according to The New York Times.
Instead, the board was reportedly more interested in an in-house graphics project called Larrabee, which was led by now-chief executive Pat Gelsinger.
Almost two decades later, Nvidia (NVDA) has become the second-most valuable public company in the world and continuously exceeds Wall Street’s high expectations. Intel, on the other hand, has seen its shares fall around 53% so far this year and is now worth less than $100 billion — around 30 times less than Nvidia’s $3.4 trillion market cap.
In August, Intel shares fell 27% after it missed revenue expectations with its second-quarter earnings and announced layoffs. The company missed profit expectations partly due to its decision to “more quickly ramp” its Core Ultra artificial intelligence CPUs, or core processing units, that can handle AI applications, Gelsinger said on the company’s earnings call.
And Nvidia wasn’t the only AI darling Intel missed out on.
Over a decade after passing on Nvidia, Intel made another strategic miss by reportedly deciding not to buy a stake in OpenAI, which had not yet kicked off the current AI hype with the release of ChatGPT in November 2022.
Former Intel chief executive Bob Swan didn’t think OpenAI’s generative AI models would come to market soon enough for the investment to be worth it, Reuters reported, citing unnamed people familiar with the matter. The AI startup had been interested in Intel, sources told Reuters (TRI), so it could depend less on Nvidia and build its own infrastructure.
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