This Mega-Cap Tech Giant May Lead Markets Higher Next

The past few weeks has seen an explosion of interest in artificial intelligence (AI) and chipmaker stocks. That’s allowed a few big-cap tech names to lead the overall market higher. And since the stock market is weighted by market cap, it may have even kept stocks from dropping so far this year.

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  • With the move higher fizzling out, it’s possible that investors are looking to new leaders to keep the 2023 rally going. One company looks set to take the leadership mantle.

    Streaming giant Netflix (NFLX) has more than doubled off the lows it set nearly a year ago. But it’s also well off the highs set in 2022. More importantly, the streaming giant has seen a big jump in user growth since cracking down on password sharing.

    That’s led to a new price target, and a potential unique tech growth opportunity now.

    While shares are a bit pricey at 35 times forward earnings, Netflix looks ready to expand its revenues and profitability from a jump in user accounts. That could help expand profit margins even further, and justify share prices moving higher from here.

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  • Action to take: Investors may like shares at current prices on any drop lower. The streaming giant has built a strong brand amid a competitive space, and is likely to keep its lead. At present, shares do not pay a dividend.

    For traders, follow the uptrend. The September $500 calls are a bit aggressive, and may not move in-the-money. But they last went for about $10.75. And they could see mid-double-digit gains as shares continue higher in the months ahead.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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