Stocks to Watch Today: Google, AMD, and Southwest Airlines

In today’s market, three notable stocks are making headlines for different reasons. Google parent Alphabet Inc. (NASDAQ: GOOG) has reached new heights, Advanced Micro Devices (NASDAQ: AMD) received a significant analyst upgrade, and Southwest Airlines (NYSE: LUV) adopted defensive measures against activist investors. Here’s a closer look at these companies’ key developments and price movements as of this morning.

Google Soars to All-Time High Before Q2 Earnings Report

Alphabet Inc. (GOOGL) hit an all-time high in intraday trading on July 5, 2024, with shares up 2.16% to $191.44. The stock has surged 36% year-to-date, outpacing the broader market.

Investors are bullish on Google’s AI initiatives, including integrating its Gemini AI model into its search engine and new AI-powered ad products unveiled at Google Marketing Live 2024. The company’s Performance Max ad platform and YouTube Shorts, which now generates 70 billion daily views, are also boosting results.

With a market cap of $2.355 trillion and a P/E ratio of 28.74, Google appears well-positioned as it approaches its Q2 earnings report, due around July 30, where analysts expect 27% EPS growth. The company also anticipates expanding operating margins in 2024, despite a 91% jump in Q1 capital spending to $12 billion.

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AMD Dubbed “Top Pick” by Analyst, Continues to Gain AI-Driven Momentum

Advanced Micro Devices (AMD) saw its stock climb 4.28% to $170.91 after Piper Sandler analyst Harsh Kumar elevated the company to “top pick” status.

The semiconductor giant has gained momentum in the AI space, boasting over 100 customers for its AI accelerators. AMD’s MI300 AI chip is expected to generate over $4 billion in sales this year.

With supply constraints easing in the second half of 2024 and the potential to penetrate the sovereign AI market, analysts are optimistic about AMD’s prospects. Kumar set a $175 price target, about 13% above current levels, citing a favorable valuation compared to peers.

AMD’s market cap stands at $276.244 billion, with a high P/E ratio of 237.54 reflecting growth expectations. The stock has returned 15.94% year-to-date and 47.57% over the past year.

Southwest Airlines Adopts “Poison Pill” Defense Against Activist Investor, Shares Dip

Southwest Airlines (LUV) shares dipped 3.46% to $27.59 after the company announced adopting a “poison pill” defense strategy.

This move aims to counter activist investor Elliott Management, which recently acquired a $1.9 billion stake in the airline. Elliott is seeking to replace CEO Bob Jordan and Chairman Gary Kelly. The poison pill allows other shareholders to dilute Elliott’s stake if it reaches 12.5%.

Southwest’s stock has underperformed the S&P 500 over 1, 3, and 5-year periods, with a year-to-date return of -3.32% and a one-year return of -23.72%. The company’s market cap is $16.517 billion, with a P/E ratio of 44.66.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.