Founded in 1993, The Motley Fool is a financial company committed to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investment solutions, free Fool. com recommendations, and market analysis. top-notch podcasts and the Motley Fool Foundation, a non-profit organization.
Founded in 1993, The Motley Fool is a financial company committed to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investment solutions, free Fool. com recommendations, and market analysis. top-notch podcasts and the Motley Fool Foundation, a non-profit organization.
August and September are traditionally two of the worst-performing months for markets each year due to seasonal factors. Many Wall Street bankers are taking time off, reducing trading volume and fewer buyers in the face of market downturns. What makes this year even more challenging is that investors face a challenging interest rate environment, with lending rates and U. S. government primary bond yields reaching levels so high that they can simply wreck the economy as a whole.
A combination of the above caused the Nasdaq Composite Technology Index to plunge 7. 4% between August 1 and September 30, and this weakness continued into October as well. As a result, many individual tech stocks are now trading at elevated prices.
But not all discounted inventories are created equal, so it’s vital for investors to be selective. Here’s one inventory to buy at the recent tech sale and another to sell.
According to a McKinsey estimate
Businesses operate in the cloud, which means that all of their valuable knowledge and virtual assets are hosted online. This makes them vulnerable to 24-hour cyber threats, which can come from anywhere in the world.
Not only does CrowdStrike provide cloud security, but it also specializes in endpoint protection, which describes any computer or device that workers use on your company’s network.
CrowdStrike claims that 90% of successful cyberattacks and 70% of successful data breaches start at endpoints, when employees interact with the outside world through email, phone calls, and messaging platforms. Each of those interactions creates a vulnerability that can be exploited by malicious actors.
But not everyone can be a cybersecurity expert, which is why the company relies heavily on artificial intelligence (AI) to automate risk detection and incident response. CrowdStrike protects more than 23,000 users, from whom it collects 2 trillion pieces of data each and every day. This data is used to exercise their AI models to increase their accuracy, and as the company grows, they will continue to improve, attracting even more consumers looking for the ultimate complex protection.
The company also just unveiled a generative AI chatbot called Charlotte, which it claims will allow companies to get to the bottom of incidents and detect vulnerabilities faster than ever before.
In the second quarter of fiscal 2024 (which ended July 31), annual recurring earnings increased 37% year-over-year to $2. 9 billion. While this is impressive, it’s only a fraction of what the company predicts will be a $158 billion addressable market. until 2026, but if McKinsey’s analysis
CrowdStrike’s inventory has remained solid since the beginning of August despite the market sell-off, which is a testament to investor confidence in the company. But it’s still 41% below its 2021 all-time high, so it’s still a wonderful time. to buy for the long term.
Peloton Interactive’s (PTON -3. 37%) percentage costs are down 46% since the beginning of August and are now trading 96% below their all-time high, set at the height of the pandemic in 2020. Over the past few years, Peloton has had an identified logo for its digitally connected home workout equipment.
Peloton’s desktop stationary bike, treadmill, and rowing device feature screens that display virtual workout categories and a number of apps to make exercise more interactive. earnings to a record $4 billion in fiscal year 2021 (ended June 30, 2021).
But since then, the company has suffered two consecutive years of declining sales, with fiscal 2023 amounted to just $2. 8 billion. Admittedly, Peloton has installed a new control team that is making all the right decisions. It lowered prices by laying off workers and moving production overseas, and opened up new sales channels through third-party stores such as Amazon and Dick’s Sporting Goods.
To compensate for weak device sales, Peloton has focused on getting more users for its mobile app, which generates revenue through monthly subscriptions. The company needs to cater to an audience that likes to work without devices, whether users prefer activities such as running or yoga, for example.
The app offers step-by-step educational plans and a platform to track your progress. And the highest subscription ($24. 99 per month) allows the user to connect the app to third-party teams other than Peloton, who deserve help developing their addressable. market.
At the end of fiscal 2023, the company had 828,000 independent members on the platform, which is still well below the 3 million connected fitness subscribers (owners of Peloton devices with an active membership). In theory, the app deserves to scale temporarily as it does. It does not require the acquisition of any hardware.
While these are all positive developments, Peloton still lost $1. 2 billion in fiscal year 2023. Many of its prices for the year were one-time and non-monetary in nature (such as supplier agreements and stock-based compensation), but the company is still heavily involved. It’s a fight for survival as it has $813 million in cash.
As Peloton’s stock industry is at a fraction of its all-time high and interest rates continue to rise, questions remain as to whether the company will be able to raise more money to continue its recovery. It’s a threat investors are forced to take on right now, especially with high-quality opportunities like CrowdStrike.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of the board of directors of The Motley Fool. Anthony Di Pizio does not have any positions in any of the stocks mentioned. The Motley Fool holds positions and recommends Amazon. com, CrowdStrike, and Peloton Interactive. The Motley Fool has a disclosure policy.
Market knowledge driven through Xignite and Polygon. io.