Recent analyst actions feature a significant upgrade for Nvidia (NVDA) amid strong earnings and robust guidance. Circle Internet Group (CRCL) also sees a rating upgrade as the analyst believes recent price declines now better reflect the company’s risk profile. On the downside, Strategy Inc (MSTR) faces challenges with its preferred stocks trading below par and looming dividend obligations, resulting in a downgrade. Wix.com (WIX) also receives a downgrade despite strong revenue growth, as concerns mount over its aggressive spending strategy and deteriorating profit margins.
Upgrades
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Circle Internet Group (CRCL): Upgrade to Neutral by Richard Durant. The analyst cites the company’s strong Q3 results and progress in revenue diversification efforts, suggesting the recent share price decline now better reflects the mounting risks.
“The company is moving in the right direction, though, with its infrastructure solutions and tokenized money market fund continuing to grow rapidly.”
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Nvidia (NVDA): Upgrade to Cautious Buy by Kenio Fontes. The analyst points to Nvidia’s stellar Q3 earnings, explosive guidance for Q4, and continued momentum in Data Center growth as key factors making the bear case increasingly difficult to maintain.
“I would like to be more confident in saying that Nvidia is a solid buy, but still, I believe that with the growth it showed this quarter and in its guidance, it is difficult to be bearish. Therefore, I think it is worth upgrading to a Buy, since Nvidia is a company that can still unlock a lot of potential and its valuation is not that high when compared to the growth it continues to experience.”
Downgrades
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Strategy (MSTR): Downgrade by Mike Fay. The analyst highlights the concerning trend of all Strategy’s preferred stocks now trading below par, limiting the company’s ability to raise capital as significant dividend obligations approach.
“The only reason Strategy has been able to buy Bitcoin to the degree that it has is due to the company’s ability to raise capital through various instruments, including convertible notes, preferred stocks, and good old-fashioned common stock dilution. Given the market dynamics currently on display in the preferred stocks, Strategy’s ability to raise through its income products going forward is likely minimal. Frankly, I think the market is actually daring the company to sell Bitcoin to pay its preferred obligations in December.”
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Wix.com (WIX): Downgrade to Hold by YR Research. Despite strong revenue growth and impressive Base44 momentum, the analyst expresses concern over the company’s return to operating losses and questions the sustainability of its current growth-over-profit strategy.
“Wix’s growth story remains strong, but previous growth-over-profit periods have led to poor shareholder returns. The question investors should ask is whether this time is different. This level of aggressiveness, for me, is making Wix borderline uninvestable. I mean, how could I invest in a company that’s moving from profit to loss on a dime? It’s also putting a big question mark about the growth achieved in the quarter.”