The stock market wrapped up the first quarter of 2024 on a positive note, driven by a widespread sense of optimism regarding the economy’s health and the anticipated decisions from the Federal Reserve concerning interest rates. Notably, several stocks in sectors like artificial intelligence (AI) maintained positive momentum.
As the market transitions into the second quarter, the spotlight is on specific equities that warrant attention based on bullish and bearish fundamentals likely to influence their trajectory. Against this backdrop, Finbold has identified the following three stocks to monitor in the first week of the second quarter.
Trump Media & Technology Group
Trump Media & Technology Group (NASDAQ: DJT), the parent company of former US President Donald Trump’s Truth Social platform, garnered significant interest with its impressive performance during its inaugural week on the stock market. Notably, DJT surged by 16% on its first official trading day following its merger with Digital World Acquisition Corp., a move approved by shareholders the prior week.
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This surge in DJT’s value coincided with a resurgence in meme stocks, attracting support from Trump loyalists and a section of investors envisioning the company’s potential to emerge as a major player in social media, particularly if Trump secures reelection and leverages Truth Social as his primary communication platform.
However, despite its initial market success, there is a need for caution when considering DJT as an investment opportunity. Some analysts liken it to a meme stock, cautioning that its valuation may surpass its actual business prospects, making it essential to monitor in the coming week.
At present, DJT is trading at $61.96, experiencing a correction of almost 7% within 24 hours, emphasizing the volatile nature of its performance.
Microsoft
Microsoft (NASDAQ: MSFT) has consistently maintained a prominent position in the stock market, primarily due to its foray into the AI landscape, mainly through its partnership with OpenAI, the firm behind ChatGPT. However, it’s worth noting that MSFT ended the previous week as one of the significant losers compared to its competitors, experiencing a drop of over 2%.
Looking ahead to the new week, investor interest will focus on Microsoft’s response following the company’s reaffirmation of its partnership with OpenAI. Recent reports indicate that Microsoft and OpenAI plan to work on a supercomputer utilizing millions of specialized server chips, potentially costing up to $100 billion.
Additionally, attention will be on how the stock responds after Wedbush Securities raised MSFT’s price target from $475 to $500, emphasizing the company’s AI ventures as a significant growth driver.
The success of Microsoft’s Copilot, an AI assistant tool, is one of the critical factors contributing to potential stock growth.
It’s important to highlight that OpenAI utilizes Microsoft data centers to power its generative AI system, ChatGPT, in exchange for Microsoft’s exclusive rights to resell OpenAI’s technology to its customers.
The potential partnership between Microsoft and OpenAI regarding the supercomputer also raises concerns about a possible downturn in the stock. Some market analysts worry that Microsoft’s increasing focus on collaborations with OpenAI may overshadow other areas of its business, potentially leading to Microsoft being perceived as primarily serving as an IT department for the AI startup.
As of the market’s close on March 28, MSFT was valued at $420.72, experiencing a 2.07% decline over the week.
Lucid Motors
Electric vehicle (EV) startup Lucid Motors (NASDAQ: LCID) has encountered a rough start to the year, with the company’s operations and, consequently, its stock being impacted by the slowdown in the EV market. Notably, in 2024, the stock has plunged over 30%, with the company struggling to compete with established entities such as Tesla (NASDAQ: TSLA).
Over the past week, the stock closed on Thursday, March 28, at a low, but the equity showed improvement throughout the week. Investors are optimistic about whether these gains could signify a new beginning for the equity predominantly traded in the red.
The changing fortunes could be due to Lucid’s new investments. Specifically, Lucid announced it is raising $1 billion in capital from an affiliate of Saudi Arabia’s Public Investment Fund (PIF).
This latest investment by the sovereign wealth fund underscores Lucid’s significant advantage in the race for survival among struggling EV startups. Notably, holding a 60% stake, the Saudi government has invested billions in Lucid’s success to diversify the Kingdom’s economy beyond oil. The company and its investors will rely on the continued partnership with the oil-rich nation to help turn their fortunes around.
However, Lucid will not rely solely on its latest investments but also on changes to its fundamental business that assure investors a better future. Currently, the focus is on the company’s manufacturing capabilities, with an expectation to produce 9,000 units in 2024, compared to the 8,428 vehicles manufactured last year.
At the time of writing, LCID traded at $2.85, with weekly gains of almost 2%.
Overall, investors considering the mentioned stock should note its susceptibility to market volatility, which may not necessarily align with the underlying fundamentals.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
