IonQ, Inc. (IONQ) Hits Amazon… Again: Should Investors Buy Into the Surge?

Posted on by The INO.com Team

On May 17, at Commercialising Quantum Global 2023, IonQ, Inc. (IONQ), which develops general-purpose quantum computing systems and makes them available through various cloud platforms and direct API access, announced that its most-powerful commercially available quantum computer IonQ Aria would be available on Amazon Braket, AWS’s quantum computing service.

This announcement marks IONQ’s latest addition to Amazon’s cloud platform after the debut of its harmony system in 2020. Although both Aria and Harmony would be available on Braket to be used as per the users’ discretion, with 25 algorithmic qubits (#AQ), the former’s computing power is more than 65,000 times that of the latter.

Further details regarding Aria’s performance, capabilities, and applications are available here.

Increasing the number of qubits, along with the number of processor operations (known as gates), makes it more likely that mistakes will creep in during calculations by making quantum computing systems susceptible to the tiniest of disturbances, including minuscule amounts of heat or radio-wave energy. In this context, it isn’t difficult to see why Aria’s commercialization is a big deal.

With users now able to explore, design, and run more complex quantum algorithms to tackle some of the most challenging problems of today across industries such as finance, healthcare, chemistry, and manufacturing, IonQ Aria has been justifiably embraced by Airbus, GE Research, Dow Chemistry, Hyundai Motors, and the United States Air Force Research Laboratory.

The markets have been prompt to mirror the optimism, to say the least. The stock has surged more than 83% over the past month to trade above its 50-day and 200-day moving averages.

However, just as we have learned during the dot-com, cryptocurrency, real estate, and numerous other bubbles through the ages, even if the next big thing comes along and changes the world (and the Internet really did), its fundamentals that determine whether a business can survive to capitalize on those windfalls.

For the fiscal year 2023 first quarter that ended March 31, although IONQ’s revenue increased by 119.4% year-over-year to $4.29 million, the topline growth has not been translated to its bottom-line improvement. The company’s loss from operations and net loss widened by 53.3% and 546.7% year-over-year to come in at $28.02 million and $27.34 million, respectively.

With the age of easy money well and truly behind us, a business with the aforementioned (lack of) financial performance would have been written off had it not been in an industry as promising as quantum computing. Continue reading "IonQ, Inc. (IONQ) Hits Amazon… Again: Should Investors Buy Into the Surge?" →

The Changing Landscape of Brick-and-Mortar Stores in Today’s Economy

Posted on by The INO.com Team

After registering two consecutive months of declines of 0.2% and 1%, on May 16, the advance sales report showed a recovery of 0.4% in retail sales for April. However, this modest rebound missed the Dow Jones estimate of a 0.8% increase. In this article, we will explore what this tepid growth means for the prospects of brick-and-mortar stores in today’s economy.

U.S. domestic consumption has been on a roller coaster ride over the past three years. People have gone from not being free enough to spending practically-free money to spend like there’s no tomorrow.

That, in turn, led to a not-so-transitory inflation, the hottest since the 1980s, forcing the Federal Reserve to implement ten successive interest-rate hikes in a little over a year to take the Fed funds rate to a target range of 5% to 5.25%.

With the stash of stimulus cash fast dwindling, average American consumers have been forced to rein in their urge to splurge to prevent inflation from biting harder. The Survey of Consumer Expectations for April carried out by the New York Fed showed that the outlook for spending fell by half a percentage point to an annual rate of 5.2%, the lowest since September 2021.

Could online retailers fare better with a complementary offline presence?

  • Yes
  • No
  • Can’t Say

While consumption may be undifferentiated from a macroeconomic perspective, businesses have evolved to tailor their offerings to cater to various consumer segments. Despite current economic uncertainties and hardships, high-income segments have been relatively unaffected, with affluent patrons queueing up for finer things in life on offer from the likes of Tiffany & Co. and LVMH.

However, middle-income consumers have been forced to go bargain hunting to squeeze out the maximum possible value from money which has gotten dearer. Hence, they have been forced to trade down to budget-friendly retailers, leaving the businesses that offer something in between wrong-footed and stranded.

The divergent prospects between off-price retailers and their middle-of-the-road peers are evident from the Street expectation regarding business performance. The fiscal first quarter revenues of Burlington Stores, Inc. (BURL) are expected to grow by 13% year-over-year compared to an 8.7% year-over-year decline at Macy's, Inc. (M).

Although budget retailers have lost sales from low-income consumers, that loss has been offset by increased business from the middle-income consumer segment. Continue reading "The Changing Landscape of Brick-and-Mortar Stores in Today’s Economy" →

Buy, Hold or Sell: A Deep Dive Into NVIDIA Corp. (NVDA)

Posted on by The INO.com Team

California-based chip designer NVIDIA Corporation (NVDA) has had an outstanding 2023. The stock has continuously outperformed the S&P 500 and more than doubled year-to-date.

The company went public on January 22, 1999. However, it was not until the pandemic that the tailwind of crypto mining resulted in a surge in demand for its chips and the stock price. This time around, NVDA is riding the waves of Generative AI and Large Language Models (LLMs) that began with the release of ChatGPT to the general public towards the end of the last year.

NVDA is set to release its financial results for the first quarter of the fiscal year 2024 after the bell on May 24. To understand how the business would fare and how its stock price could be impacted after and beyond the upcoming earnings, let’s understand how the global provider of graphics, computation, and networking solutions has grown from being a major player in the gaming industry to an AI giant.

During the dawn of the PC revolution, NVDA’s founder and CEO, Jensen Huang, realized the emergent applications and demand for accelerated computation on the horizon and designed its first high-performance graphics chip in 1997. However, given the relative scarcity of use cases, the fledgling chip designer chose to bet on visual effects and gaming and struck the jackpot.

In 1999, the company launched what it claims to be the first programmable graphics card, the GeForce 256, and popularized the term, Graphics Processing Unit (GPU). In 2000, the company was the first exclusive graphics provider for Microsoft and Xbox.

Since then, these GPUs have become the mainstay of high-resolution gaming and animation to form the primary business of NVDA and contribute around 80% of its revenue.

Moreover, crypto miners hoarded and bid up these gaming GPUs at the peak of crypto-mania. However, with the onset of crypto winter due to rising interest rates and increased regulation risk, those GPUs flooded back into the market. The resulting oversupply led to a 46% year-over-year decline in gaming revenue.
Continue reading "Buy, Hold or Sell: A Deep Dive Into NVIDIA Corp. (NVDA)" →

Is Getaround (GETR) a Buy After New Deal News?

Posted on by The INO.com Team

By December 9, 2022, when Softbank-backed car-sharing company Getaround, Inc. (GETR) went public by merging with InterPrivate II Acquisition Corp., a Special Purpose Acquisition Company (SPAC), it was already late to the party.

Due to the fading appetite, relative to its peak in 2020 and 2021, for SPACs amid increasing interest rates and persistent downward market volatility, GETR’s shares tanked as much as 65% on its debut.

Six months on, GETR completed its acquisition of the assets of HyreCar Inc. (HYREQ), a premier gig car-sharing marketplace. With the acquisition expected to contribute up to $75 million of run-rate annualized Gross Booking Value, is the stock worth buying? Let’s find out.

Launched in 2011, GETR is the world’s first connected car-sharing marketplace which aims to simplify sharing of cars and trucks through its proprietary cloud and in-car Connect® technology and enable the shift away from car ownership. Today, the company has a presence across 1000 U.S. and European cities.

Which of the value-adjusted assets listed below would you prefer to let out for passive income if you have the scope?

  • Residential real-estate
  • Commercial real-estate
  • Multiple cars

According to its preliminary unaudited financial results for the fiscal year ending December 31, 2022, GETR’s total revenues are expected to come between $59 million and $60 million. The company expects its service revenue for the year to be between $57 million and $58 million and its cash and cash equivalent to be around $64.3 million.

Since the company is yet to file its annual report on Form 10-K, on April 26, GETR received a notice from the New York Stock Exchange (NYSE) regarding its non-compliance to the continued listing standard that requires the filing of all required periodic reports with the Securities and Exchange Commission (SEC). Continue reading "Is Getaround (GETR) a Buy After New Deal News?" →

3 Food Stocks to Buy Instead of Beyond Meat (BYND)

Posted on by The INO.com Team

For the stock of Beyond Meat, Inc. (BYND), seemingly on a one-way descent, its high of $186.83 on January 26, 2021, seems like a distant memory. The precipitous decline in the company’s stock price has reflected the alarming decline in its top line, which is more than the category average due to the inflation-led slowdown.

Founded in 2009 by its CEO Ethan Brown, BYND targeted meat eaters with plant-based products that replicate animal meat in look, feel, and taste. The company partnered with grocery and restaurant chains to increase the reach and visibility of its products.

In the interest of sustainability, which of the following options would you prefer?

  • Consuming regular quantities of plant-based meat
  • Consuming animal protein in moderation and on occasions

The hype surrounding the brand, further accentuated by big-name celebrity endorsements, helped the company’s stock make a strong market debut in 2019.

However, the company’s single-minded pursuit of growth and expansion through innovative offerings came in lieu of mounting debt and cost overruns.

Moreover, the company’s tendency to overpromise and underdeliver also didn’t help. As a result, the company had to switch its priority from growth at any cost to sustainable growth with healthy cash flows.

However, this attempt to scale down while moving forward has resulted in revenue decline, loss of market share to competitors, and a consequent slump in share price.

While BYND deals with its struggles and charts an arduous path to profitability, here are some alternative food stocks to consider.

Nestlé S.A. (NSRGY) is a global nutrition, health, and wellness company. The company’s segments include Europe, the Middle East, and North Africa (EMENA); Americas (AMS); Asia, Oceania, and sub-Saharan Africa (AOA); Nestle Waters; Nestle Nutrition; and Other Businesses.

NSRGY's offerings include powdered and liquid beverages; water; milk products, and ice cream; nutrition and health science; prepared dishes and cooking aids; confectionery; and PetCare.

In 2017 NSRGY acquired Sweet Earth, a Calif.-based vegan foods manufacturer. In 2019, Sweet Earth announced the launch of its new vegan burger product, Awesome Burger, and its ground beef component, Awesome Grounds. Both products are currently distributed to supermarkets, restaurants, and universities.

For the fiscal year 2022, NSRGY’s total reported sales increased by 8.4% to CHF 94.4 billion ($104.66 billion), with organic growth coming in at 8.3% year-over-year. The company’s underlying EPS increased by 8.4% to CHF 3.42 during the same period.

For the first three months of 2023, NSRGY’s total reported sales increased by 5.6% year-over-year to CHF 23.5 billion ($26.05 billion). Organic growth came in at 9.3%, while acquisitions had a net positive impact of 0.3%.

Hormel Foods Corporation (HRL)develops, processes, and distributes a range of branded food products globally. The company operates through three segments: Retail, Foodservice, and International.

Back in 2019, HRL forayed into products that reduced meat consumption with its “Fuse Burger,” made from ground turkey and rice.

Despite a challenging start to the fiscal year 2023, persistent impact from inflationary pressures, supply chain inefficiencies, and lower-than-expected sales volumes, HRL’s sales and operating income for the first quarter came in at $3 billion and $289 million, respectively. The company’s diluted EPS came in at $0.40.

Tyson Foods, Inc. (TSN) is a protein-focused food company whose segments include: Beef; Pork; Chicken; and Prepared Foods.

In 2019, the company launched its line of meat-free and blended protein products called Raised & Rooted. After starting with nuggets made from a blend of pea protein powder and other plant ingredients, the brand diversified into blended burgers made with a combination of plant-based ingredients and Angus beef.

For the second quarter of fiscal year 2023, TSN’s sales demonstrated a marginal increase to $13.13 billion. On May 11, the company declared a quarterly dividend of $0.48 and $0.432 per share on its Class A and Class B common stock, respectively. The dividends would be paid out on September 15, 2023, to shareholders of record at the close of business on September 1, 2023.