Ticker Take - biotech stocks set to surge?

A weekly newsletter on investing.

An update on the markets

Things have looked a bit more wobbly this week, although stocks continue to hover near all-time highs. Investors seem jittery about the jobs market. But at the same time, strategists at Barclays say there could be some nice catalysts on the horizon — such as the upcoming earnings season, which they believe will show AI demand continuing to outpace supply.

So…could the S&P 500 reach 7,000?

Bloomberg’s research team asked that question and established a fair value model for the S&P 500 is below the index’s current level. They do have a bullish scenario that would support 7,000 being reached this year — but only in a scenario where the U.S. Federal Reserve dramatically lowers interest rates and the economy reaccelerates.

Biotech stocks set for a big comeback?

Can you make money with biotech stocks? The sector is coming out of a brutal bear market, but momentum is building again. This week, Pfizer bought Metsera to catch up in the booming weight loss drug market, while UniQure shares surged after a promising Huntington’s disease trial update. Veteran biotech investor Eden Rahim calls this a potential “eureka moment” for the industry. He joined us on our Ticker Take YouTube channel to share 10 stocks he’s extremely confident about — not the “go up or blow up” kind, but names with strong pipelines, mid-cap growth stories, and companies harnessing AI. You can check out our full conversation with Eden below!

“AI Enablers” Crush Mag 7 Returns!

While much of the AI boom is viewed through the lens of the Magnificent 7, a group of stocks known as “AI efficiency enablers” have risen by more than triple the Mag 7 this year.

With the likes of Open AI and Meta putting a priority on power efficiency, these companies are very much in demand. There are a number of indexes (and subsequently ETFs) that are built around the theme.

Mind you, Nvidia is typically included in this group as well.

But other stocks would, on average, include — Schneider Electric, Delta Electronics, NEC, and Vertiv. More specifically, these companies focused on improving things like chip efficiency, servers, storage, cooling and the complicated systems needed to power modern data centers.

Can Starbucks shares gain ground?

The Starbucks turnaround continues, with the company announcing plans to close stores and eliminate 900 jobs in a $1 billion restructuring effort. It’s a continuation of new CEO Brian Niccol’s effort to stick with the most profitable locations and make those remaining restaurants more inviting.

That’s a delicate process, involving both menu innovation and a simpler drinks menu, to try and speed up wait times.

So far, it’s taking longer than some had thought for Niccol’s efforts to show profit improvements. But analysts are generally on-board with the Starbucks plan. Of the more than 40 analysts who cover the company, the average target price for the stock is $97, which would imply about 15% of potential upside.

Thanks for saying hi!

Thanks to everyone who said hi at the Blossom Investor Tour stop in Toronto last weekend! Congrats to the Blossom team for putting together a great event. Caroline and I had so much fun and look forward to seeing many of you in person again soon.

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Disclaimer: this content is for informational purposes only and does not constitute legal, financial, or professional advice. Always consult a qualified professional regarding your individual situation.