Big Actions Are Coming on Wall Street

Earn While You Learn! ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, Big Actions Are Coming on Wall Street Get ready for some action in the next few days. There are several key earnings reports that are due this week — Microsoft, Meta Platforms, Apple, and Amazon. After two disappointing reports from Big Tech companies (Tesla and Alphabet), the stakes are high for others to deliver results and keep the rally alive. On Semiconductor, Advanced Micro Devices, and Qualcomm will also report results to shed some lights on the demand for AI chips. Callie Cox at Ritholtz Wealth Management was glad to see other sectors rallying to support the market, as Big Tech companies can’t lead the market forever. - “Now that we’re seeing more participation, even though it’s caused some volatility over the past few weeks, I think this is ultimately a better story for long-term investors as we move forward,” said Callie Cox, chief market strategist at Ritholtz Wealth Management. Callie Cox, chief market strategist at Ritholtz Wealth Management (Photo: CNBC) However, there are two keys that will determine if small-cap stocks can keep rallying. First, nobody knows if the rally can survive if the rest of the Big Tech companies disappoint in their earnings releases. They are heavyweights, so their declines may be powerful enough to drag the rest of the market down with it. Second, the economy must stay healthy. Small-cap stocks are much more sensitive to the economy, so the prospect of an interest rate cut may not be enough to excite investors if earnings were going to suffer from a slowing economy. What’s more, the Federal Reserve will meet for its FOMC meeting on Tuesday and Wednesday. Fed Chair Jerome Powell will host a presser on Wednesday to discuss the central bank’s decision. Wall Street expects the central bank to leave interest rates unchanged and for Fed officials to hint at a rate cut sometime soon in the fall. Buy This Software As It Prepares To Focus On Profitability Today’s Stock Pick: HubSpot (HUBS) Data is the new oil. That’s a popular saying nowadays. Sure, data can be incredibly powerful for a company to tap into. But here’s a problem... Customers expect a company to be integrated. Meaning? Let’s imagine a scenario. A customer views HubSpot’s articles on creating mouthwatering content. It is obvious that the customer is interested in something related to creating content. But a HubSpot salesperson would contact that customer trying to talk about HubSpot’s sales tools. That wouldn’t be the right topic to start a conversation about, right? A salesperson must be able to view the customer data from the marketing team and decide which conversation he/she should start with. That requires the company to integrate data into one platform where employees from different departments can view. That is what HubSpot offers. (Source: HubSpot) There are two major leaders in this space: Salesforce and HubSpot. Let’s start with Salesforce. It is the industry leader for the CRM, but HubSpot offers unique solutions for small- and medium-sized businesses. Its platform is easier to use where entrepreneurs don’t need full-time IT staff to manage the platform. In other words, HubSpot is like Apple while Salesforce is like Microsoft. HubSpot has about 216,000 customers in 120+ countries, giving it nearly unlimited opportunities to expand revenue from its existing base of customers. As a result, HubSpot has one of the strongest track records of quarterly revenue growth. In the graphic below, you can see that the company never failed to grow its revenue since first quarter of 2017: (Source: HubSpot) More importantly, HubSpot has been growing its profitability steadily with a 17x growth since 2017. Its operating profit margin grew alongside total profits. In other words, HubSpot is becoming more and more profitable over the years. This is the type of metrics that investors want to see nowadays. It’s all about growing profitability now. (Source: HubSpot) Notably, HubSpot is aggressive in its research & development budget. The company allocated between 18% to 20% of its revenue to R&D since 2020, ensuring that its products will continue to be one of the best on the market. At the same time, HubSpot sets a long-term target of an operating margin of 20% to 25% -- a significant jump from 2023’s 15%. How will this be possible? HubSpot will cut its Sales & Marketing allocation from 43% to 30% to 35%. (Source: HubSpot) That is a massive jump in operating margin! Now is the good time to buy as HubSpot is transitioning to a more profitable company. As a bonus, its TAM is large and expanding. HubSpot said it has less than 10% penetration across all product and customer segments. (Source: HubSpot) Bottom line: HubSpot is pivoting its focus to become a more profitable company by doubling its operating margin as a long-term target. Now is a good time to buy while the company makes its transition, and you would also enjoy the software-type growth that the stock market loves. The stock recently plunged on the news of the dropped efforts by Alphabet to acquire HubSpot, but it didn’t change HubSpot’s business prospects at all. Now is a good time to grab shares while they are cheap. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](