This Stock Could Go Parabolic! + Battle of the Brands: Target vs. Amazon

It’s Tuesday, and the story on the street is that Nvidia’s AI craze hangover still continues to drag the market down with it. 

I know I know… it’s old news. But everyone’s still talking about it as if their 401(k) is all tied up in Jensen Huang’s pocket books. 

In fact, it’s plunging so fast that technical analysis traders are coming out of the wood works scribbling lines over their charts trying to find the bottom…

(Source: Bloomberg) 

But that’s a story for another time.

Shifting to today’s recent news, we have a more interesting story this morning about a quiet AI company that’s set to go parabolic faster than a Taylor Swift album on release day… 

And a classic case of Battle of the Brands: Target vs. the Undisputed Champ: Amazon.

As always, we have a lot to dive into this morning…

So let’s get to it!

This AI Stock Could Go Parabolic… (Like Soon) 

We’re about a year and a half in from the initial ChatGPT craze that ignited the AI frenzy, and it’s no secret that the AI hype train is still the hottest buzzword on the market. 

(Source: Medium)

But while everyone and their grandma is throwing money at Nvidia, Taiwan Semiconductors, and whatever else sounds vaguely tech-y - there’s a sneaky underdog in the corner that’s priming up to steal the AI spotlight as the Cinderella of the AI ball. 

So what’s this data infrastructure company that’s flying under the radar but deserves your undivided attention? Enter NetApp (NASDAQ:NTAP), and right now it’s enjoying the AI frenzy like a kid in a candy store. 

(Source: Architecting IT) 

Now, while most may overlook this company as some kind of fishing equipment manufacturer, it’s not only catching massive profits instead of fish - It’s been quietly killing it in the background while everyone else is busy taking selfies with their Nvidia screenshots. 

But what exactly is NetApp and why am I even writing about it this morning? 

Well this company isn’t just about boring old data storage; it’s about intelligent data infrastructure solutions. Think of it as the smart kid in class who not only does their homework but also tutors everyone else. 

(Source: Giphy) 

NetApp helps major public cloud service providers like Amazon, Google, and Microsoft handle the massive data demands that AI is driving. We’re talking all-flash data storage, zero-trust security models, and optimizing data flow like a pro. 

The secret to the opportunity is the fact that NetApp operates in two main segments: hybrid cloud and public cloud. The public cloud is where you let someone else handle the heavy lifting—think of it as outsourcing your laundry.

Big names like Amazon Web Services (AWS), Google Cloud Platform (GCP), and Microsoft Azure are clients. These guys let their customers scale resources without worrying about maintaining their own IT hardware. But, just like trusting your laundry to a stranger, there are privacy concerns.

(Source: Acceleration Economy) 

Enter the hybrid cloud—a mix of public and private clouds. It’s like doing laundry at home for the delicate stuff and sending the rest to the laundromat. Companies use private clouds for critical data and public clouds for the rest. It’s complex and can be pricey, but it gives more control. And guess who’s making it all work smoothly? You got it—NetApp.

(Source: Giphy) 

Now while that’s all fine and dandy, the real proof of how parabolic NetApp’s stock could be is in its latest quarter results. Which is almost like watching a superhero movie—full of action and smashing records as it not only crushed its 20-year high, but the company reported a solid fiscal Q4 2024 EPS beat by a penny, with revenues rising to $1.67 billion. 

(Source: Yahoo Finance) 

Their all-flash array annualized revenue run rate surged 17% year-over-year to $3.6 billion. They even hit record gross margins—71% GAAP and 72% non-GAAP. And with a dividend increase and an extra $1 billion added to their stock buyback program, it's clear they’re not playing around…

Especially as NetApp’s CEO George Curian is acting like the Nostradamus of data, predicting that their total addressable market (TAM) will expand to over $100 billion by 2027. That includes a whopping $14 billion from AI storage alone. 

This simple prediction combined with the clear view NetApp’s explosive growth has analysts taking note, with Susquehanna raising its price target to $155 and Stifel bumping it up to $180. 

(Source: Investing.com) 

They see the potential in NetApp’s role in the AI boom, especially with 70-80% of enterprise data being unstructured—perfect for AI to munch on.

But what has it done recently? Like yesterday you ask? 

Well over the past week, NetApp’s shares are up 4.12% while the broader industry is down. In the past year, the stock has climbed 71.36%, outshining the S&P 500. If you’re eyeing a stock that’s not just riding the AI wave but possibly driving the boat, NetApp is definitely it.

(Source: Google Finance) 

Now, I'm not saying NetApp is a guaranteed golden ticket. The stock market is about as predictable as a cat on catnip, especially as Nvidia seems to be dancing to the tune of Katy Perry’s “You’re Hot and You’re Cold” music video.

(Source: Giphy) 

But even still, while everyone’s busy ogling Nvidia and Taiwan Semiconductors, NetApp is no doubt quietly positioning itself as the unsung hero of the AI revolution. 

But remember, always do your own research to see if it’s right for you. Don’t come crying to me if NetApp doesn’t become the next darling we all think it could be… I’m a writer, not a fortune teller. Now if you’ll excuse me, I need to go check if my $5 investment in dogecoin has made me a millionaire yet. 

Battle of The Brands: Target vs. Amazon 

We all know that Amazon is the undisputed king of online marketplaces, sitting on its throne, laughing maniacally while counting Prime subscriptions. But as it turns out Target has just decided to challenge Amazon’s King of the Hill throne. How?

(Source:StarupTalky) 

Well Target has announced that it’s partnering with Shopify to bring a selection of popular merchants and their products onto Target Plus, its third-party digital marketplace. This isn’t just about adding more brands online; Target is also planning to feature some of these Shopify products in its physical stores. 

Think of it as Target inviting Shopify’s cool kids to sit at their table, making their marketplace more appealing and diverse.

(Source: Giphy) 

Cara Sylvester, Target’s EVP and chief guest experience officer (yes, that’s a real title), said this partnership will expand the variety of items available at Target, blending Shopify’s trendy offerings with Target’s already popular mix. 

(Cara Sylvester Doing Her Best Guest Experience Performance. Source: Target Corp.) 

So, you might soon find those cool D2C brands you’ve been eyeing online right next to your favorite Target finds.

But why is this a big deal? 

Because in the e-commerce world, it’s all about the numbers. Amazon has a whopping 200 million Prime subscribers. Walmart has 24 million for Walmart+. Target Circle, which is free, has 100 million members. 

(Source: The Search Monitor) 

Target’s strategy here is clear: get more eyeballs and more clicks by expanding its online offerings without breaking the bank on inventory costs. By letting Shopify merchants handle the fulfillment, Target can offer a wider range of products without the overhead.

It’s a smart move, especially since e-commerce is a tough game to make money in. Even Amazon didn’t turn a profit for nearly a decade, relying instead on its other ventures like AWS and advertising to keep investors happy. Walmart has been making impressive strides in e-commerce, and this partnership is Target’s way of saying, “Hey, don’t count us out just yet.”

(Source: Giphy) 

Harley Finkelstein, Shopify’s President, hit the nail on the head when he said it’s crucial for merchants to be where customers are. With this partnership, Shopify merchants get access to Target’s massive customer base, both online and in-store. It’s like getting invited to the biggest party in town. 

Shopify’s Marketplace Connect app makes it easy for merchants to manage orders across multiple platforms, streamlining the process and making it a win-win for everyone involved.

Target Plus, which launched in 2019, currently hosts over 2 million products from 1,200 partners. While that’s a tiny fraction compared to Amazon’s nearly 2 million selling partners and Walmart’s 135,000, this partnership with Shopify could be the boost Target needs. 

It’s a strategic move to level the playing field a bit and make Target Plus a more formidable competitor in the e-commerce arena.

(Source: Giphy) 

The timing is also key. Target has been struggling with declining sales, reporting a 3.7% drop in comparable sales for the fourth consecutive quarter and a 3.2% overall sales decline in Q1 2024. 

By bringing in Shopify’s popular merchants, Target is hoping to attract more customers and reverse these trends.

Obviously, Amazon is still the heavyweight champion of e-commerce, but Target teaming up with Shopify is like Rocky getting a new trainer before the big fight. It’s an exciting partnership that could shake things up and give Target a much-needed edge. And who can blame them? Target needs all the help it can get. 

Stocks.News holds positions in Amazon, Microsoft, and Google as mentioned in the article.