Can the AI save the rally?

Earn While You Learn! ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, Can the AI save the rally? There were some positives and negatives from Microsoft’s earnings report. Microsoft plummeted as much as 6% after its earnings report before paring some losses. Why? Slower-than-expected cloud growth. The Azure cloud-computing service posted a 29% revenue growth in the quarter, decelerating from the 31% growth in the previous quarter. Notably, about 8% of that growth was credited to AI. CFO Amy Hood said Azure growth will continue to slow in the current quarter, but she expects the growth to accelerate again in the second half of fiscal 2025. The company has invested heavily in building out data centers to meet the insatiable demand for cloud computing and AI services. The CapEx was at $19 billion this quarter, and Hood expects the number to rise in the new fiscal year. Moreover, investor relations chief Brett Iversen said Microsoft is trying to build as quickly as possible to meet the demand for cloud and AI services. “We’re building out for that as quickly as we can,” he said. (Source: Bloomberg) So, we are at a delicate time where Big Tech companies are making huge CapEx investments to meet the surging demand. This means a short-term hit to its profit before it could potentially accelerate growth again. While Big Tech companies struggled to deliver measurable profit growth from their massive investments in AI products, the “pick and shovel” play on the AI frenzy continued to print money. Advanced Micro Devices surged more than 7% after beating estimates. The chipmaker’s net income jumped nearly 10-fold versus the year-ago period. The company also raised its outlook for data center GPU (a popular AI chip) for the year. Could it be enough to save the rally in the market? Maybe, maybe not. It will be more difficult if Meta Platforms (today) and Apple/Amazon (tomorrow) failed to deliver superb earnings results. The Federal Reserve will announce its interest rate decision today, along with Fed Chair Jerome Powell hosting a press conference. Investors are praying for the Federal Reserve to hint at a September rate cut because there are some signs that the economy is starting to slow down. A September cut could be a catalyst to make up for a potential weakness in tech earnings. - “If the Fed does not signal a September rate cut, markets could get a bit ugly given recent tech weakness — especially if earnings underwhelm,” said Tom Essaye at The Sevens Report. Top Software Stock To Buy While It’s Dirt Cheap Today’s Stock Pick: Fastly, Inc. (FSLY) Convinced that information technology is ready for a blast-off but unsure which stock to buy? You’ve come to the right place. Listen, it’s far better to bet on an industry before you select any stock. The reason is simple. A company would ride on tremendous momentum from the industry’s growth, rather than swim against the current. That’s the reason why Fastly is a perfect stock. It operates in a red-hot industry of Content Delivery Network (CDN). Put simply, CDN is a service that makes websites run faster due to localized servers and content caching. CDN is projected to grow 12.5% CAGR until 2030, according to Research and Markets: (Source: Research and Markets) The biggest players in this industry are Fastly, Cloudflare, and Akamai. And each company probably would do well. It’s not a “winner takes all” industry like Uber and Lyft. For example, you see plenty of banks that are successful in the banking industry. But Fastly is easily the most undervalued of all. Fastly has struggled since 2020 where its stock price lost about 94% of its value. The reason was simple — revenue growth slowed down. It was growing as much as 40%, which was difficult to sustain. Fastly is now trading at 2.03 P/S, which is unbelievably cheap. Cloudflare is trading at 18 P/S! It’s a one-time opportunity to buy cheap in a top company in a fast-growing industry. Big-name customers: Fastly boasts top tech companies as a customer, such as Stripe, DoorDash, SquareSpace, LifeTime, Chick-fil-A, Gannett, Betterment, and JetBlue. Obviously, they are not a small-time player. Their business models rely exclusively on the website running fast and properly. Modest revenue growth: The stock has fallen lately because Fastly’s revenue decelerated in the last three quarters to 13.56% in the most recent quarter. The company expects to grow its revenue by 10% this year. (Source: MacroTrends) But we’re talking about the reality of being in business. Any company will have good and bad years. But as long as the industry’s prospects are spectacular, it’ll get past a slow cycle and accelerate growth again. Bottom line: Warren Buffett once dished out marriage advice. I don’t know if he is a good expert on this topic. But he said: - “What's the secret of a great marriage? It's not looks, nor intelligence, nor money — it's low expectations.” The market has low expectations for Fastly. And we are talking about a major competitor in a fast-growing industry. The bar is low. With its stock trading at ~2 P/S when the stock used to see 20x revenue in the past, the risk/reward is fantastic. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](