Stocks on Wall Street ended higher on Friday, but the benchmark S&P 500 index snapped its five-week winning streak, as mounting inflation fears sapped investor sentiment.
Between another batch of high-profile earnings reports from notable companies, like Walmart (NYSE:WMT), Target (NYSE:TGT), Macy’s (NYSE:M), Home Depot (NYSE:HD), NVIDIA (NASDAQ:NVDA), and Cisco (NASDAQ:CSCO), as well as more important economic data—including the latest U.S. retail sales figures—the week ahead is expected to be an eventful one.
Regardless of which direction the market goes, below we highlight one stock likely to be in demand in the coming days and another which could see fresh losses.
Remember though, our timeframe is just for the week ahead.
Stock To Buy: Alibaba
Alibaba (NYSE:BABA) could finally see its shares bottom this week, as China’s most valuable technology company—and largest internet retailer—prepares to release its latest earnings report before the bell on Thursday, Nov. 18.
Consensus expectations call for the tech behemoth, which has been the subject of increased antitrust scrutiny by authorities in Beijing for most of the year, to announce earnings per share of ¥11.95 ($1.87), falling 33% from EPS of ¥18.00 ($2.82) in the year-ago period.
Revenue, however, is forecast to jump almost 32% year-over-year to ¥204.2 billion ($32.0 billion), reflecting ongoing strength in its core e-commerce business.
Indeed, in a sign that should bode well for the future, Alibaba's Singles' Day shopping extravaganza, which started at the beginning of November and ended at midnight on Nov. 11. set a new sales record despite worries about the impact of Beijing’s clampdown on the country’s tech sector.
Outside of its core retail segment, cloud revenue, which has increasingly become another major growth driver for Alibaba, will also be eyed as it tries to solidify its spot as a global leader in the cloud-computing space, along with U.S. rivals like Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Google (NASDAQ:GOOGL).
Beyond the top- and bottom-line numbers, investors will be eager to hear commentary from Alibaba CEO Daniel Zhang regarding the outlook for the months ahead as the tech giant further aligns itself with the priorities of China President Xi Jinping.
BABA stock—which has climbed roughly 20% since falling to a near three-year trough of $138.43 on Oct. 4—closed at $166.81 on Friday. At current levels, the Hangzhou, China-based e-commerce heavyweight has a market cap of $452.2 billion.
Despite the recent bounce, Alibaba shares are still down 28% year-to-date and are approximately 47% below their record peak of $319.32 reached in October 2020. Perhaps that's why value investor Warren Buffett's 'sidekick' and Berkshire Hathaway's (NYSE:BRKa) Vice Chair, Charlie Munger, recently loaded up on BABA shares.
Stock To Dump: Tyson Foods
Shares of Tyson Foods (NYSE:TSN) are likely to experience a volatile week as investors brace for disappointing guidance from one of the world’s largest chicken, beef, and pork producers when it reports its latest financial results.
The Springdale, Arkansas-based food corporation, which together with its subsidiaries owns major consumer brands, such as Jimmy Dean, and Hillshire Farm, is scheduled to release fourth quarter numbers before the U.S. market open on Monday, Nov. 15. Wall Street is calling for the meat products producer to post earnings of $2.09 per share, improving roughly 15.5% from EPS of $1.81 in the year-ago period.
Revenue, meanwhile, is expected to increase around 19% year-over-year to $12.7 billion, benefitting from strong demand from both consumers and restaurants.
Perhaps of greater importance, Tyson Foods’ outlook for the end of the year and early 2022 will be in focus as it deals with the negative impact of an accelerating inflationary environment, rising raw material costs, supply chain issues, as well as potential changes in consumer behavior.
When the company reported Q3 earnings on Aug. 9, it warned that the ongoing inflationary environment will put pressure on its ‘Prepared Foods’ business in the next few quarters.
TSN stock closed Friday’s session at $81.23, not far from its recent pre-pandemic high of $83.76 touched on Oct. 25, earning the meats producer a valuation of $29.6 billion.
Tyson Foods shares have outperformed the broader market by a slim margin in 2021, climbing 26% year-to-date, compared to the S&P 500’s 24.6% gain over the same timeframe.