With November shaping up to be yet another record setting month for U.S. stocks, it’s time to look ahead at what December may bring. While predicting near term market movements is difficult, like last year, there’s a good chance this month’s run turns into a Santa Claus rally. As has been the case lately, pandemic developments and inflation rhetoric will rule the day, but the market has the wind at its back with the holiday shopping
season still ahead.
So, given the absence of major earnings reports in December, traders are left with other short-term strategies to fatten their accounts and close the year in style. Sometimes the best strategy is to simply ride the momentum of recent winners. After all, market leaders often remain leaders for an extended period.
It's early to crown certain stocks as November winners with overpriced Thanksgiving dinners yet to be devoured. But given the recent developments with these three companies, it may be time to gobble up more shares in anticipation of some bonus December upside.
Why is Nvidia Stock Up?
You wouldn’t know there’s a global semiconductor crisis by looking at Nvidia’s (NASDAQ:NVDA) share price which has surged 24% month-to-date. The visual computing specialist delivered another consensus beating quarter last week that showcased a 61% jump in profits. Despite ongoing supply chain constraints, sales of Nvidia’s gaming and data center products remain strong. Management’s fourth quarter outlook was also bullish and could very well get surpassed again.
Nvidia has a new growth catalyst in the hopper in its professional visualization business. The segment more than doubled its sales last quarter amid rising interest in virtual 3D simulations from architects, urban planners, and other creative professions. Combine this with healthy underlying demand for gaming and data center technology and slowly easing supply effects in the automotive business, and Nvidia now has four divisions experiencing positive momentum.
Since the Q3 report, sell-side firms have been overwhelmingly bullish on Nvidia. A trio of analysts set $400 price targets and virtually all consider the stock a buy based on the multiple growth drivers in place.
Is Albemarle a Good Lithium Stock?
Albemarle (NYSE:ALB) is looking like not only a November winner but a 2022 winner. If the stock can climb to the $295 level it will have notched a two-bagger for the second straight year.
The chemical manufacturer has become a popular electric vehicle (EV) play due to its increased presence in the lithium market. As auto manufacturers accelerate their EV plans during the economic recovery, demand for the key EV battery material continues to surge—as do lithium prices. The going rate for lithium carbonate eclipsed its 2017 high last month and is closing in on 200,000 Chinese yuan per ton.
With lithium up more than 300% this year, its easy to see why Albemarle and other lithium producers have been crushing it. And with demand forecasted to stay hot and global lithium supplies limited, 2022 is shaping up to be a banner year. Analysts are forecasting 46% profit growth next year on the strength of the lithium environment and rebounding global demand for bromine products. This makes Albemarle an EV stock to ride not only in December but into January and beyond.
Is the Intuit Pullback a Buy Opportunity?
Intuit (NASDAQ:INTU) shares have pulled back the last couple days after gapping up to $700 following a blowout fiscal first quarter result. The near-term profit taking is looking like a buy opportunity for a company with some serious wind in its sails.
For the three months ended Halloween, Intuit produced scary good revenue growth of 52% topping the $2 billion mark. While its core QuickBooks and TurboTax offerings make strong contributions, the star of the quarter was Credit Karma which Intuit acquired late last year. As more and more Americans go online to discover loan, credit card, and bank account deals, many are turning to the Credit Karma app.
This is good news for a company that has historically faced heavy seasonality in its business model with tax time being the make-or-break period. Plus, with the recently acquired Mailchimp soon to be brought into the fold, Intuit will have a second major growth driver to smooth out its usual earnings lumpiness. This means that investors no longer have to hinge their hopes on Intuit’s February through April performance and traders can play the stock year-round.
A whopping 15 research firms have called Intuit a buy since the recent report including Goldman Sachs which upgraded to a buy and $840 price target. Look for the stock to go dashing through the snow to more gains this winter.
Before you consider Intuit, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Intuit wasn't on the list.
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