00:00:00 Speaker A
Now time for some of today’s Trending Tickers. We’re watching Uber, IBM, and Hershey. First up, Uber shares building on all-time highs hit during the session on Monday. Shares the ride share company of risen 60% year to date. That’s despite competition from self-driving offerings, like Waymo and Tesla, which, of course, kicked off its first self-driving vehicle rides in Austin last month. The shares now pulling back a little bit, but we’ve been seeing them hover near record highs. And also, I should mention, Bank of America out with a note this morning and raising their price target on the stock to 115. You see, it’s just under 96 right now. They say it’s based on a higher free cash flow multiple, and they are looking at other things. They say the, um, the Tax and Spending Bill and the pullback in tax on tips could be good for Uber drivers and, therefore, good for Uber. Uh, they also said if they look at some of the background data that there is a booking acceleration for Uber rides. So, that is interesting, as well. Uh, Mark Malik is still with me here. Um, it’s interesting to see this move that we have seen in Uber to record highs, um, given as I said, that there is this increasing competition in that in the robotaxi industry.
00:02:02 Mark Malik
Yeah, I think that’s sort of the general consensus. But I looked at it different. So, Uber’s been my pick for the robotaxi play, right? So, Uber has the brand, they have the technology, they have the footprint there already. They’re not beholden to the capital expenditures that maybe a Tesla might have, where they got to put cars on the road, where Uber can take cars from anywhere. Exactly. So, they have that infrastructure there, and they’ve always been my clear play for the robotaxi space. That doesn’t mean that they’re not going to get competition from Waymo, from Tesla, and possibly others, even other car makers might get into it, as well. However, I think they’re best positioned to sort of move swiftly into where the markets go. They understand the market better than anybody. So,
00:03:07 Speaker A
Yeah.
00:03:08 Mark Malik
that that makes sense to me that they’re in that spot.
00:03:12 Speaker A
Have you taken a Waymo yet?
00:03:17 Mark Malik
Uh uh have I no, I’ve not. But but I have been next to them and been very jealous of the people inside of them. I have not had a chance yet, but I’m looking forward to it.
00:03:28 Speaker A
Yeah, definitely. Me, too. I’m in the same boat. Um, let’s talk about IBM, too. Also, speaking of stocks near record highs, announcing its first update to its Power line of chips for the first time in half a decade, the company says the new line of Power 11 chips and servers will be more energy efficient than their competitors. And later this year, they plan to integrate the new system with its AI chip called Spire. Um, as I mentioned, this is another stock that has been climbing. It’s up more than 30% year to date. It’s trading if not at a record high, certainly near a record high today. And Mark, you know, this has been one of those that people called a value trap for years, and then has had a breakout under CEO Arvind Krishna that’s been really interesting.
00:04:34 Mark Malik
Yeah. I mean, the the the the complete landscape is changing. And IBM was always poised to take advantage of that landscape. I would I don’t want to say right place, right time. I want to give them a little bit more credit than that. But you know, IBM has, uh, has I’ve had exposure to IBM for some time now, uh, certainly in the, uh, in the, uh, in the supercomputer space. They’re definitely out there. They have the horsepower to go and compete with the servers that are out there right now, the super micros of the world. Everyone’s screaming about Super Micro the last couple days, and because there is nothing there there, other than hopes of great success, which likely they’ll have. However, there is some there there with IBM, who very much could compete, uh, you know, with the Super Micro, Core Weave, and all these companies that are now astronomically valued that are all based on just hope. So, IBM is a real solid one to have in there. It took a while to get some conviction on that because as you said, it was looked at as a value trap. Uh, but it suddenly I started to see it more of of like a sleeping giant. And, uh, you know, you start out with a small conviction. And, you know, we’re here, and then they’re realizing it, and they’re proving it out right now. I’m excited to see how this one plays out.
00:06:52 Speaker A
It’s funny we don’t use, um, the word blue the words blue chip as much anymore, right? But hearing you talk about it reminds me of that phrase, which we used to apply to these sort of what were viewed as sort of high quality workforce names.
00:07:20 Mark Malik
Yeah. Well, and in this environment, in this environment, it’s like comforting. It’s a little bit comforting to have these, uh, you know, these these blue chips, these well, you know, these stocks that you grew up with, and you know about them. You know that they’re well-run companies. You know that they have the the capital to make acquisitions and to sort of play in the space. And let’s remember IBM has footprints in every data center already. So, this is really just an extension of of of what, you know, what they’ve been doing for years. So, in this crazy market, where we’re trying to figure out crazy valuations, sure, we should we should be very comforted by the fact that there’s a blue chip in the space, and we could look back to those names that we all loved.
00:08:22 Speaker A
Right. All right. Let’s talk about another name that we love, or at least we love their products for sure. Hershey confirming it’s going to have a new Chief Executive Officer come August. That’s Kirk Tanner. He’s currently CEO of Wendy’s. Tanner will depart Wendy’s on July 18th ahead of taking the position at Hershey. CFO Ken Cook will take over as interim CEO of Wendy’s, as that fast-food company searches for a permanent replacement. All of this because Hershey’s CEO Michele Buck is set to step down, I believe, next year. Um, you can see Hershey shares a little bit lower, uh, as we got this. The the stock is not much changed year to date. It’s up about 1.5%, or actually, that might have been wiped out, uh, by today’s declines here. Um, you know, the shares have just kind of plugged along. And what do you what do you make of both Hershey and, sort of, consumer staples more broadly, Mark?
00:09:27 Mark Malik
Challenging environment, right? Uh, you know, staples, uh, has not done great as a as a sector this year. Uh, Hershey’s slightly underperformed the sector. Uh, Hershey’s under a lot of challenge right now. Uh, you know, input costs are going up, right? It’s very it is very sensitive to its input costs. And of course, demand is not what it used to be. And I don’t know if you can blame it on the GLP-1s, but you know, the tastes of consumers are changing, right? We see it more broadly in the industry with alcoholic beverages and so on and so forth. Tastes seem to be possibly going away from those from from those sweets that we grew up the blue chip sweets that we grew up with. Uh, but, uh, you know, I’ll never turn down a Hershey’s Kiss. So,
00:10:26 Speaker A
Yeah, who would? I I actually grew up going to Hershey Park, as well. So, I got that aspect of going through the chocolate factory, or I don’t know if it was the real chocolate. The chocolate factory ride at the very least at Hershey Park.
00:10:46 Mark Malik
Been there myself.
00:10:47 Speaker A
Yes. All right. You can scan the QR code below to track the best and worst performing stocks with Yahoo Finance’s Trending Tickers page.