May 22nd, 2023 | 09:55 CEST
Now things can move very quickly: Amazon, Deutsche Bank, Defence Therapeutics
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At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
Amazon: An AI profiteer in the long term
The Amazon share is still trading well below its all-time high of USD 188.65. Investors recently only had to pay around USD 116 for a share. Just a few months ago, the stock was only trading in double digits. Some analysts, such as Michael Hartnett from Bank of America, recently warned of an AI bubble in tech stocks. According to the analyst, coupled with rising interest rates, this would suggest an exit from technology stocks. But while US key interest rates are now slightly above the level of inflation and the banking system in the US is under pressure, there is much to suggest that the number of interest rate steps still to come is limited on the upside. Instead, an end to quantitative tightening could soon be a harbinger of interest rate cuts in the coming year. The headwinds for tech stocks announced by the Bank of America are, therefore, unlikely to be more than a gentle breeze.
Although smaller AI stocks are probably already more than ambitiously valued, Amazon remains a different calibre: regardless of short-term hype, the retail giant, which has long been present in our living rooms, should benefit greatly from AI. One only has to think of support staff, whose jobs should become much more efficient with the help of generative AI. The weak sales of the past quarters are also likely to be only temporary - Amazon's market power is too great, and its market position too solid. Any hint of an "AI correction" could be an opportunity for prospective Amazon shareholders.
Deutsche Bank: Stay vigilant despite the jubilant mood
The Deutsche Bank share also celebrated a small comeback recently. At last week's annual general meeting, the incumbent management even earned praise. A return of 9.4% on tangible equity convinced investors - with the biggest profit in 15 years, there is nothing to complain about. Nevertheless, how the bank will perform in the current year remains to be seen. The uncertainty in the banking system and the temporary risk premiums that even Deutsche Bank had to take on the market could impact the figures. However, all this remains pie in the sky, given a 50% higher dividend. The market could celebrate the Deutsche Bank share even further - but investors should remain vigilant.
Defence Therapeutics: Numerous projects against cancer
Vigilance is also worthwhile when it comes to the Defence Therapeutics share. The biotech company was one of the high flyers on the market in the first quarter of the year. Not without reason: the Company has numerous options for commercial products thanks to its patented Accum™ technology. Accum™ helps active substances or vaccines to work better within cells and appears to be universally applicable. Comparative studies are currently underway to see if Accum™ can assist mRNA vaccines. Accum™ could be an additional option alongside existing adjuvant technologies, such as those used by BioNTech in its COVID-19 vaccine. In parallel, Defence Therapeutics is also working on vaccines against various types of cancer. Here, too, Accum™ plays a central role. In potentized form, the technology is also intended to act as a chemotherapeutic agent under the brand name AccuTOX™ - a Phase I study is currently being prepared in cooperation with the renowned City of Hope hospital in the greater Los Angeles area. The fact that Accum™ is a technology to be taken seriously is also shown by the cooperation concluded this year between Defence Therapeutics and the medical division of the French nuclear group Orano. Both companies plan to use the Accum™ technology as a radionuclide-antibody conjugate.
The share has weakened over the past weeks and is currently trading at around EUR 2.00. Operationally, however, Defence Therapeutics remains on track. Despite the speculative nature of the share, the value should have potential given the many options for successful commercialization. The prospect of at least slightly falling interest rates should do growth companies good per se. While stocks such as Amazon and Deutsche Bank currently offer the prospect of solid profits, Defence has the potential to be a high-flyer. However, investors should not ignore the associated risk.
Conflict of interest
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