Close menu




December 14th, 2022 | 11:54 CET

Nvidia, Meta Materials, BASF - High-tech stocks in focus

  • metamaterials
  • chemicals
  • hightech
Photo credits: pixabay.com

Interest rate hikes this year put pressure on the share price of many high-tech stocks. The NASDAQ has lost over 27% in the last year. It has hit second-tier stocks in particular, but big players such as Amazon, Facebook and Google have also lost ground. On December 13, the US inflation figures were lower than expected at 7.1%. Today, Wednesday, the next interest rate decision by the FED is due. Both news could lead the way for the coming weeks, as the NASDAQ has been bottoming out since October.

time to read: 4 minutes | Author: Armin Schulz
ISIN: NVIDIA CORP. DL-_001 | US67066G1040 , Meta Materials Inc. | US59134N1046 , BASF SE NA O.N. | DE000BASF111

Table of contents:


    Nvidia - Mixed outlook, but strong share price performance

    Since mid-October, Nvidia has decoupled from Google, Amazon and Facebook and gained a good 60% in 2 months. This seems surprising given the economic environment, i.e. high commodity prices, inflation, rising interest rates and export bans to China. Additionally, the crypto market is showing weakness, which still impacts the graphics card maker that should not be underestimated. Even if the CEO denies a major impact, one can see rising inventories in the past quarterly figures. If you take the last quarterly figures, inventories increased by 71% YOY.

    That being said, the group reported revenue of USD 5.93 billion, down 17% YOY and 12% quarter-over-quarter. GAAP earnings per diluted share were USD 0.27, down 72% YOY and up 4% quarter-over-quarter. Non-GAAP earnings per diluted share were USD 0.58, 50% lower than a year ago and 14% higher than the prior quarter. In addition, data center revenue increased 31% YOY, and the Company paid out a quarterly return of USD 3.75 billion to shareholders. The successful launch of new platforms is expected to drive new growth.

    Most analysts are positive on the stock. Of the 43 analyses in the past 90 days, 31 view the stock as a buy. 11 recommend holding and only one recommends selling. On average, the price targets are around USD 203. Currently, one share pays around USD 178.55. The next minor resistance is at USD 179.47. The next major resistance is between the zone at USD 191.64 and 192.74. New growth markets are 5G and the electric vehicle market.

    Meta Materials - Spin-off executed

    There has been a lot going on at high-performance functional materials and nanocomposites (metamaterials) specialist Meta Materials in recent weeks. The Company can significantly support the development of megatrends with its unique metamaterials. Since early November, it has been working with DuPont Teijin Films and Mitsubishi Electric Europe to improve the safety and efficiency of lithium-ion batteries. Meta Materials' PLASMAfusion copper foil plays a decisive role in this. In mid-November, the Company swept up two awards, the CES 2023 Innovation Award for its NANOWEB shielding foil, and from Deloitte, the Company was recognized as a Clean Technology in the Technology Fast 50 program.

    On November 17, the Company opened its new headquarters in Dartmouth, Canada. The 68,000-square-foot facility will house R&D, advanced packaging for semiconductors, unique materials and chemical research, and the development and manufacture of holographic and other optical products. Board Chairman Jack Harding commented, "Today marks a historic milestone for Meta Materials." On November 23, the Board of Directors gave the go-ahead for the spin-off of its oil and gas business from its subsidiary Next Bridge Hydrocarbons. On December 7, FINRA approved the exchange of Meta Materials' preferred stock for Next Bridge Hydrocarbons' common stock.

    The activities surrounding the spin-off gave the share fresh momentum. In early October, the share marked its low at USD 0.63. Since then, the share climbed as high as USD 2.34 by December 7. The share price received support from Jack Harding, who bought 126,000 shares through his subsidiary in November. With the rise in the share price, the NASDAQ listing issues are also off the table. Since the high in December, however, the share price has fallen again by more than 45%. The main reason is likely to be the sales of the largest shareholder Thomas Welch, who sold 75,000 shares. He is still expected to hold more than 23 million shares. If the USD 1.24 holds as support, a retest of the USD 2.34 is possible.

    BASF - Renewed fear of gas shortages

    Does BASF belong to the high-tech stocks? At the very least, the Company is involved in all three High-Tech Start-up Funds through BASF Venture Capital GmbH, which was first established in 2005, and is also part of the investment committee. In addition, high-tech companies are also among the Ludwigshafen-based company's customer base. Their well-being is critical to the chemical company's success, but they face challenges such as high energy costs, falling demand, disrupted supply chains and rising interest rates. Now that the cold snap is rolling in and gas could become scarce after all, this uncertainty is putting pressure on BASF's stock.

    Back on October 26, the Group announced its Q3 results. Sales increased by 12% compared to the same period last year, reaching EUR 21.9 billion. However, EBIT before special items fell by EUR 517 million to EUR 1.3 billion, mainly due to higher raw material and energy costs. To optimize earnings, the Group aims to cut costs by EUR 500 million by 2024. To be prepared for the future, it plans to invest billions in China. Experts expect the growth markets to be in Asia. Currently, China accounts for just 15% of the Group's sales.

    The move is understandable, as there are greater uncertainties in Europe due to the energy shortage. These uncertainties are poison for the share price of any company. This is also why UBS put the stock at Sell with a price target of EUR 38 on December 13. The analysts expect 2023 to be a challenging year for the chemical group. Currently, the share is trading at EUR 47.68. An upward trend has been established since October, which was only broken when the share price closed below EUR 44.19. The analysts expect the share price to remain stable. If the Company keeps its dividend constant, the current dividend yield is around 7%.


    Conclusion
    Should the FED put the brakes on interest rate hikes in view of falling inflation, this would boost high-tech stocks. Nvidia has already performed well in recent months. Meta Materials is a growth company, as its recent sales figures have shown. Falling interest rates would be particularly good for second-tier stocks. BASF is struggling with energy problems - additional costs were EUR 2.2 billion in the first nine months.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    Armin Schulz

    Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.

    About the author



    Related comments:

    Commented by Juliane Zielonka on February 22nd, 2024 | 07:00 CET

    Royal Helium, Fresenius, BASF: Chemical and Healthcare industry - Where is the next investment opportunity?

    • Helium
    • Healthcare
    • chemicals

    Europe is in the midst of an industrial upheaval due to the Green Deal, which presents both challenges and opportunities for investors. While companies like BASF are arguing for deregulation and increased subsidies to support the green transition, healthcare company Fresenius is undergoing a period of radical change and realignment. The medical technology market is booming. The global MedTech market size amounted to USD 574,002.45 million in 2022 and is expected to increase to USD 814,159.2 million by 2028, with an annual growth rate of 6.0%. Critical raw materials such as helium are in particularly high demand. Royal Helium is one of the producers of this valuable gas and impresses with a well thought-out and sustainable business model. Where does the next investment opportunity lie?

    Read

    Commented by Fabian Lorenz on February 21st, 2024 | 07:00 CET

    Top news: BYD, Bayer and Globex Mining

    • Mining
    • Gold
    • Commodities
    • Electromobility
    • chemicals

    Bayer shocked investors yesterday with the announcement of its dividend cut, which shouldn't have been much of a surprise. The Company is burdened with high debt, endless legal fines, and an empty pharmaceutical pipeline. In an initial reaction, analysts have lowered the share price target. BYD, on the other hand, is doing well operationally. Only the share price is not picking up. Will a share buyback turn the share price around? For those who want to profit from the commodity boom with reduced risk, then Globex Mining's stock is attractive. The news flow is strong, and those who act quickly can still register and follow the live presentation of the mining incubator at the 10th International Investment Forum, IIF, today.

    Read

    Commented by Fabian Lorenz on February 7th, 2024 | 07:30 CET

    BASF shares on the upswing, BioNTech sees breakthrough in cancer, and Defence Therapeutics benefits from study

    • Biotechnology
    • chemicals
    • Cancer

    Can BASF shareholders look forward to better times? One analyst is certainly hopeful. He believes that the chemical industry will recover in 2024. However, the price target gives pause for thought. The development of cervical cancer is also concerning. According to a new study, the number of cases has risen sharply in recent years, and with it, HPV infections. Accordingly, more HPV vaccines are urgently needed. The market volume is expected to more than double to over USD 15 billion in just a few years. Defence Therapeutics aims to become a profiteer. The biotech company is fighting cancer with its Accum™ platform. BioNTech CEO Ugur Sahin also believes that humanity will get cancer under control, thanks in part to artificial intelligence. The Company is currently working on 30 cancer therapies. Is it a good time to invest now?

    Read