Chicago, IL – February 12, 2025 – Zacks Equity Research shares Twilio TWLO as the Bull of the Day and Ford Motor Company F as the Bear of the Day. In addition, Zacks Equity Research provides analysis on NVIDIA Corp. NVDA, Taiwan Semiconductor Manufacturing Co. Ltd. TSM and RF Industries, Ltd. RFIL.
Here is a synopsis of all five stocks:
Zacks Rank #1 (Strong Buy) stock Twilio is a cloud communications platform enabling developers to integrate various communication channels, such as voice, messaging, and video, into their applications through a set of APIs. Developers use Twilio to build and customize communication features in web and mobile applications, allowing businesses to enhance customer engagement, automate processes, and facilitate seamless communication. Twilio’s services include programmable messaging, voice calling, video conferencing, and more, providing a flexible and scalable solution for businesses to create personalized and efficient communication experiences.
Twilio counts Fortune 500 juggernauts like Airbnb, Dell and Netflixas customers. The company’s products mean that automated customer service technology can reply to customer inquiries instantaneously, save time, money, and boost overall customer satisfaction.
Twilio’s consistent efforts in developing innovative communication products boost top-and-bottom line performance. After swinging from a loss to a profit in 2023, Twilio has never looked back. Last quarter, EPS bolted 76% year-over-year.
Twilio acquired SendGrid, a cloud-based email delivery service that helps businesses send and manage both marketing and transactional emails. Through key acquisitions like SendGrid, Twilio now offers a full suite of digital engagement tools rather than a niche offering.
Meanwhile, the company is not only diversifying its product suite but also its global footprint. For instance, Twilio expanded its footprint to the Indian communication market by acquiring communications platform-as-a-service ValueFirst. Twilio’s multi-pronged strategy encompasses both organic growth and growth through aggressive acquisitions.
Twilio shares jumped 20% late last month after the company provided surprise bullish guidance at an investor conference. Twilio expects margins to be a juicy 21-22% by 2027, far ahead of Wall Street expectations (currently, TWLO’s margins are ~16%).
Twilio’s robust results can be attributed to its integration with OpenAI’s ChatGPT-4, which allows more personalization and a much more robust product. Though investors cheered the pre-announcement news, a quick glance at the TWLO chart shows that investors are in no rush to sell shares for a profit. TWLO has held its gap bullishly and is consolidating constructively.
Because they are unexpected, pre-announcements can act as a tailwind for months. Recall that Super Micro Computer (SMCI) more than tripled in a few months after pre-announcing earnings early last year.
Several Wall Street analysts tracked by Zacks have bolstered their earnings expectations for the company over the past two months, echoing management’s bullish view. Recent analyst revisions higher is a bullish sign and a core ingredient to the powerful Zacks Rank.
By leveraging its cloud communications platform and through strategic acquisitions like SendGrid, Twilio is expanding its product suite and global reach. The integration of GPT-4 further drives innovation and improved margins in excess of analyst expectations.
Zacks Rank #5 (Strong Sell) stock Ford Motor Company, established by Henry Ford in 1903, is an American automotive manufacturer headquartered in Dearborn, Michigan. Being one of the world’s leading automakers, Ford provides a vast product portfolio of cars, trucks, SUVs, and commercial vehicles, including its luxury Lincoln brand and electric vehicles (EVs).
Ford’s recent earnings history has been checkered, with some quarters beating, and some missing badly. Presently, the July quarter is in control. F shares stumbled more than 18% on volume turnover nearly four times the norm, after the automaker missed Zacks Consensus estimates by a wide margin of 26.56%. Conversely, fellow legacy automaker General Motorshas beaten Wall Street’s earnings estimates.
An integral reason Ford missed earnings estimates is weakness in its EV segment. Ford has been forced to scale down its EV production amid slowing EV demand. Meanwhile, though EV demand will likely pick up eventually, Tesladominates the market by a significant margin. Further, many customers who want to avoid diving dive straight into an EV are opting for hybrids from Toyota Motors, leaving Ford out in the cold.
Ford’s relative weakness is illustrated not only in its faltering fundamentals but also in its share price. Tesla and GM are up 74.80% and 18.90% over the past year, respectively, while Ford lags far behind, down 29%.
Ford’s struggle to manage warranty expenses has been another sore spot for the automaker. Quality issues in several models from 2016-2021 have led to an $800 million increase in warranty costs. Though management intends to address these issues, they have communicated to shareholders that the problems may not be resolved for more than a year, at the very least. In other words, the warranty issues will cause a bearish overhang in the stock for the foreseeable future.
Ford CEO voiced concerns about tariffs on CNBC yesterday, saying,“So far, what we’re seeing is a lot of cost and a lot of chaos.If you look at the tariffs, let’s be real honest, long term, a 25% tariff across the Mexico and Canadian border will blow a hole in the US auto industry that we have never seen.”
Despite its storied history, Ford Motor faces significant headwinds, including missed earnings, slowing EV demand, and increased competition from Tesla and other automakers. Additionally, persistent quality issues will likely weigh on the stock over the coming months.
The semiconductor market, which started rebounding earlier last year, carried the momentum and ended 2024 on a high. Semiconductor sales made a solid jump in 2024, with the final quarter proving to be one of the best.
The jump in sales witnessed over the past few quarters is being powered by robust enthusiasm surrounding artificial intelligence (AI), especially generative AI. Last month, semiconductor stocks, particularly those involved in AI, suffered after the launch of DeepSeek, a low-cost AI model from China. DeepSeek’s rise raised concerns of an imminent threat to the dominance of U.S. tech companies in the AI space. However, those concerns soon faded, and optimism began to return.
Given this scenario, it would be ideal to invest in semiconductor stocks such as NVIDIA Corp., Taiwan Semiconductor Manufacturing Co. Ltd. and RF Industries, Ltd. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Semiconductor Industry Association (SIA) said recently that global semiconductor sales totaled $627.6 billion in 2024, up 19.1% from last year’s total of $526.8 billion. Sales also jumped a solid 17.1% year over year in the fourth quarter of 2024, totaling $170.9 billion, and up 3% sequentially.
The announcement from SIA comes just days after a separate report from Gartner showed global semiconductor sales hit $626 billion in 2024, up 18.1% year over year. The report also projected semiconductor sales to hit $705 billion this year.
High demand for semiconductors at data centers has been boosting sales. Also, the memory market played a key role in driving semiconductor sales in 2024, with revenues skyrocketing by 71.8% compared to the previous year.
A large number of technology companies have been heavily investing in AI and its development. Businesses that have deeply incorporated AI into their products have seen significant expansion in recent years.
Last month, Chinese startup DeepSeek shook up the U.S. AI space by introducing a free, open-source assistant that it claims operates with lower-cost chips and requires less data. The company said that developing the AI model cost under $6 million, raising doubts about the assumption that AI would drive strong demand throughout the supply chain, from semiconductor manufacturers to data centers.
As a result, tech and semiconductor stocks suffered a sharp decline. However, concerns quickly eased as analysts suggested that the Chinese model was overestimated.
Experts believe AI still has vast untapped potential. The growing optimism is expected to push demand even further as more semiconductor firms enter the AI race.
NVIDIA Corp. is a major player in the semiconductor industry and has been one of the standout success stories of 2023 and 2024. As a leading designer of graphic processing units (GPUs), the value of the NVDA stock tends to surge in a thriving crypto market. This is primarily due to the crucial role that GPUs play in data centers, artificial intelligence, and the mining or production of cryptocurrencies.
NVIDIA’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 4.3% over the past 90 days. Currently, NVIDIA has a Zacks Rank #2.
Taiwan Semiconductor Manufacturing Co. Ltd. is the world's largest dedicated integrated circuit foundry. As a foundry, TSM manufactures ICs for its customers based on their proprietary IC designs using its advanced production processes. Taiwan Semiconductor Manufacturing Company Limited’s goal is to establish itself as one of the world's leading semiconductor companies by building upon the strengths that have made it the world's leading IC foundry.
Taiwan Semiconductor Manufacturing Company Limited’s expected earnings growth rate for the current year is 29.6%. The Zacks Consensus Estimate for current-year earnings has improved 3.5% over the past 90 days. TSM presently carries a Zacks Rank #2.
RF Industries, Ltd. is engaged in the design, manufacture and distribution of coaxial connectors used in radio communications applications as well as in computers, test instruments, PC LANS and antenna devices.
RF Industries’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 40% over the past 90 days. RFIL presently carries a Zacks Rank #2.
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Ford Motor Company (F) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report
Super Micro Computer, Inc. (SMCI) : Free Stock Analysis Report
Twilio Inc. (TWLO) : Free Stock Analysis Report
RF Industries, Ltd. (RFIL) : Free Stock Analysis Report
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