Today’s Trade Ideas
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1. Bullish AI Catalyst for Alibaba
Alibaba was upgraded by both Morgan Stanley and Morningstar about their excitement of their planned AI capex spending that they pledged last week. Morgan Stanley looking very positive on their cloud revenue. And Morningstar is saying that the shares are undervalued. And that's quite a statement given the shares have already rallied 50 percent this month alone.
Morgan Stanley and Morningstar upgrades on Alibaba underscore a bullish sentiment driven by their planned AI capital expenditure. Despite a significant rally this month, analysts suggest the stock remains undervalued, reflecting strong potential in Alibaba's cloud revenue and AI initiatives. Audio Listen At 00:01:17 - 00:01:45
2. Avoid New Buys in Costco Due to Elevated Valuation
I've held Costco for years... but I'm not buying it today because of the higher PE ratio. I bought it at a trailing PE of 40 and now it's at 55.
The host outlines his personal trading decision regarding Costco. Despite holding a profitable position from a previous purchase, he advises against initiating new buys at current levels because Costco's valuation has significantly increased (from a trailing PE of 40 to 55), making it less attractive for additional entry. Audio 00:14 - 00:16
3. Domestic Truck Maker Benefiting from Tariffs
I also want to mention Paccar. It was topping in the S&P 500, the NASDAQ 100 here at the close, up about 5.2%. It's a truck maker and it rallied after the President Trump announced new industry specific tariffs that include a 25% levy on heavy trucks. And Alice say this company will benefit because it makes a lot of its trucks right here in the United States.
The commentary points out that Paccar, a domestic truck maker, surged roughly 5.2% on news of a 25% tariff on heavy trucks. The emphasis on U.S.-based production underpins a bullish outlook amid government policy favoring domestic manufacturing.