Academy News TOP 3 stocks for March 2023

TOP 3 stocks for March 2023

Which 3 stocks were among the most traded among Purple Trading clients in March and why? Read our analysis and find out what market segments were swarming with trading opportunities in March.

Published: 13.04.2023

Stocks Microsoft

Microsoft shares - a bet on artificial intelligence?

Microsoft shares have thrived in the turbulent course of 2023 so far. They have risen by more than 20%, clearly outperforming the market. However, the company's fiscal Q2 results and the sum up of the recent quarter both raise a lot of questions. The still-unfinished acquisition of Activision Blizzard and the increasing likelihood of a looming recession are also not very positive for the possible development of Microsoft's share price. So how will Microsoft shares fare in the coming months?

Microsoft has had a few months of mixed financial results, reporting adjusted earnings per share of $2.32 in its fiscal second quarter compared to the $2.29 analysts were expecting. The company's revenue came in at USD 52.75 billion, slightly missing the forecast of USD 52.94 billion. Revenue in the Intelligent Cloud segment, which includes Azure public cloud, Windows Server, SQL Server, Nuance, and Enterprise Services, came in at $21.51 billion, up 18% from a year ago and slightly above analyst consensus.

In Q3, Microsoft expects revenue of $50.5 billion to $51.5 billion, a 3% year-over-year growth. However, this number disappointed the market as analysts were expecting $52.43 billion. The company's own CFO said that the personal computer market would shrink again, which should lead to a roughly 17% year-over-year decline in the segment that includes the Windows operating system.

Akcie společnosti Microsoft v platformě MT4 na časovém rámci H1 společně s 50 a 100 denním klouzavým průměrem

_{Microsoft shares on the MT4 platform on the H1 timeframe along with the 50 and 100-day moving averages}

In recent months, Microsoft has been increasing its efforts to connect AI with its software and services. On 23 January, Microsoft announced a new $10 billion investment in the startup OpenAi. Microsoft already provides its Azure cloud infrastructure for OpenAI. It is also adding OpenAI models to its software products. In early February, Microsoft unveiled its new Bing search engine and Edge web browser, which use AI technology.

Microsoft hopes that OpenAI-based technology can help Bing reduce Google's dominance in the Internet search market. The news was positive for Microsoft's stock price, which rose more than 4%. While the share of internet search engines still points to Google's clear dominance, its Bard artificial intelligence is proving to be a complete fiasco so far.

The coming months will be extremely interesting for Microsoft stocks. The company's mixed financial results have caused some investors to speculate about its future. While the company's cloud business continues to grow, the Personal Computing business segment is experiencing a decline. Microsoft is investing heavily in artificial intelligence to improve its products and services, which could be an opportunity for further growth.

However, the question mark still hangs over Activision's acquisition of Blizzard, but there is movement here as well. Last week, Microsoft won an important court case in the UK. Any positive news, however, will have a greater impact on Activision Blizzard shares. However, another earnings season is also approaching, and as expected, sales for the quarter just passed should not be glorious. The increasing risk of a recession coupled with the aforementioned factors may send Microsoft stock lower. However, we have seen several times over the past year that earnings season can cause an interesting rally in stocks. Thus, beating analysts' expectations could help MSFT stock to yearly highs.

Nvidia shares - is artificial intelligence the new crypto?

Nvidia can be clearly identified as one of the winners of the first quarter of the year. In fact, Nvidia shares have appreciated by almost 90% since the beginning of the year. What is behind this success? And what is the outlook? The financial results for the last quarter were generally positive. Nvidia reported fiscal Q4 revenue of $6.05 billion and adjusted earnings per share of 88 cents, beating Wall Street expectations. The outlook was also positive, with Nvidia expecting sales of $6.5 billion for Q1. Data center sales, which include the majority of AI GPU sales, were up 11% year-over-year.

This growth led to positive reactions from more than a dozen analysts, who either raised their target prices or maintained a positive rating on the stock. The company's CEO Jensen Huang said during a call with analysts that the AI rollout is at an inflection point. Thus, artificial intelligence could mean long-term revenue growth and its boom is not unlike that around cryptocurrencies.

Akcie společnosti Nvidia v platformě MT4 na časovém rámci H1 společně s 50 a 100 denním klouzavým průměrem

_{Nvidia shares in the MT4 platform on the H1 timeframe along with the 50 and 100-day moving averages}

The development of artificial intelligence and advanced chips will thus be a key factor in the technology industry's fierce battle for dominance in the AI market in the coming period. Nvidia seems to be the closest to it among chipmakers. The company is expanding in AI chips, which are used in supercomputers, data centers, and drug development.

Nvidia is also making significant inroads in metaverse applications, cryptocurrency mining, and self-driving electric cars. However, macroeconomic uncertainties and the risk of a global recession could still impact the value of Nvidia shares, which have risen so significantly in recent months. The moment the "risk on" sentiment disappears from the market, Nvidia shares could suffer. The growing tensions between the US and China over Taiwan are also not very positive. Thus, while Nvidia's fundamentals speak positively and the stock may be an interesting long-term investment, from the perspective of a few months, there is a lot of uncertainty in the market and Nvidia shares may be particularly attractive to speculators, quite possibly in both directions.

Palantir shares - a speculator's paradise?

Palantir shares have long been among the most popular with Purple Trading clients. A look at the longer-term chart clearly shows significant volatility, making Palantir shares a speculator's paradise. This has been borne out by the company so far in the year to date, with Palantir shares up over 25%. However, during February, they were up an even further 25%. In fact, Palantir reported its first-ever profitable quarter, which is definitely noteworthy after 20 years of the company's existence.

Palantir shares reacted to the positive news by rising as much as 20% in a single day. Revenue was also positive, beating market expectations by $7 million and up 18% year-over-year. Investors have long been worried by the company's over-reliance on government contracts. So the good news is that the number of commercial clients will grow from 147 to 260 in 2022. As a result, revenue from the commercial section will nearly decimate between 2018 and 2022.

Akcie společnosti Palantir v platformě MT4 na časovém rámci H1 společně s 50 a 100 denním klouzavým průměrem

_{Shares of Palantir in the MT4 platform on the H1 timeframe along with the 50 and 100-day moving averages}

Palantir even expects to be able to make a profit for the full year 2023. Revenues should then be around $2.18 to $2.23 billion. That would mean year-on-year growth of up to 17%. Between 2021 and 2022, however, sales grew by 24%. In the quarter just past, Palantir would then report sales of $503 million to $507 million, which would be up 13% from the same period a year ago. Thus, even Palantir is benefiting from the development of artificial intelligence, which it has been using to process large amounts of data for a long time.

But does the slight gain beat slowing revenue growth in the long term? For growth companies like Palantir, satisfactory growth is often more important than profits. We must also keep in mind that Palantir's capitalization is $17 billion, nearly nine times last year's revenue. Moreover, Palantir's products are extremely expensive - subscribing to its main product Foundry comes with a one million dollars per month fee. Thus, if a recession sets in, individual companies will think twice about their costs, and commercial client growth may not be as significant as last year. Thus, given the factors mentioned above, a return to the annual low may be more likely than a peak.

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TOP 3 stocks for March 2023

Microsoft shares - a bet on artificial intelligence?

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Nvidia shares - is artificial intelligence the new crypto?

Palantir shares - a speculator's paradise?

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