Another down day for tech stocks weighed on the broader market Friday, with today's leg lower sparked by reports that a new artificial intelligence model from Chinese startup Moonshot AI bridges the gap with several U.S. models. Poorly received earnings results from streaming giant Netflix (NFLX) weighed on sentiment, too.

At the close, the tech-heavy Nasdaq Composite was down 1.4% at 25,520, the broader S&P 500 was off 1.0% at 7,457, and the blue-chip Dow Jones Industrial Average was 0.8% lower at 52,146.

News that Moonshot AI's Kimi K3 is powerful enough to rival models from OpenAI and Anthropic revived competition fears — and rehashed memories from early 2025, when China's DeepSeek sent stocks into a tailspin. It also pressured several AI-related names, including Nvidia (NVDA, -2.2%) and Intel (INTC, -2.0%).

Netflix stock slides after earnings

A negative reaction to Netflix's second-quarter results also weighed on the S&P 500 and Nasdaq today, with the communication services stock sliding 7.3% — its worst day since April 17.

While the company's earnings of 80 cents per share beat analysts' estimates, its revenue of $12.56 billion fell short and its third-quarter revenue forecast came in slightly below the consensus.

In addition, Netflix said it will begin reporting engagement data on an annual basis vs a bi-annual one. "The goal of separating the publication of the report from our earnings results is to keep the focus on our primary financial metrics — revenue and operating profit," the company explained.

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Despite the top-line miss and subsequent stock sell-off, Argus Research analyst Joseph Bonner reiterated a Buy rating on Netflix. He also maintained a $120 price target, representing implied upside of 74% to current levels.

"While competition is intense amid macroeconomic uncertainty, Netflix remains the 'anchor tenant' for consumers in long-form video streaming," says Bonner. "We see the company's incremental moves into live-event sports programming as particularly directed at enhancing its advertising market as well as subscriber acquisition," adding that live events have a higher ad value than scripted content.

As for that advertising business, Bonner notes that Netflix expects ad revenue to double this year, to $3 billion, showing that this segment "continues to scale rapidly.

Travelers soars on Q2 beat

On the plus side of the ledger was The Travelers Companies (TRV), which jumped 9.2% — making it the best Dow Jones stock today — after the property and casualty insurer reported better-than-expected second-quarter results.

In addition to higher demand for insurance, Travelers also saw its catastrophe losses narrow in Q2 and its net investment income soar.

"The scale of our earnings and cash flow enable us to invest in differentiating technology, including AI, at a level that sets us apart, further strengthening the competitive advantages that power those results," said Travelers CEO Alan Schnitzer.

Ahead of earnings, Truist Securities analyst Mark Hughes initiated coverage on the blue chip stock with a Buy rating, saying it is trading at an attractive valuation. "More broadly, we believe the P&C group should be a good performer in light of its consistent topline, limited credit exposure, and moderate interest rate sensitivity."

The earnings calendar heats up next week, with Magnificent 7 stocks Alphabet (GOOGL, -2.2%) and Tesla (TSLA, -2.6%) both reporting.

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Netflix is raising subscription prices across all of its U.S. streaming tiers, marking the second increase in just over a year and adding to what many subscribers refer to as "streamflation."

The price hike, rolling out this week, increases the standard plan with ads by $1 per month, while standard and premium plans rise by $2, according to pricing posted on its website.

Here’s how the increases break down and what they could mean for your monthly streaming budget.

Why Netflix is raising prices

Pricing for Netflix tiers is now higher across the board, meaning most subscribers will see a bump in their monthly bill depending on their plan.

The move aligns with a broader industry trend, as competitors like Disney+ and Max have also raised prices in recent months while pushing toward profitability.

Here's how the updated pricing breaks down by tier:

What it means for subscribers

The new prices take effect immediately for new subscribers. Existing customers will see the changes at their next billing cycle.

While the monthly increases are relatively small, they can add up over time, especially for households paying for multiple streaming services. Rising costs across platforms are also pushing more viewers toward lower-cost, ad-supported tiers or prompting them to rotate subscriptions to manage spending.

How to save on streaming as prices rise

As streaming prices continue to climb, small changes to how you subscribe can make a noticeable difference. Here are a few simple ways to keep your costs in check.

Rotate your subscriptions: Keep one or two services at a time, then cancel and switch once you've watched what you want

Choose ad-supported tiers: Lower-cost ad supported plans can significantly reduce your monthly bill

Bundle services when possible: Packages like Disney+ and Hulu can offer better value than standalone subscriptions

Look for perks through other subscriptions: Some plans like T-Mobile or Walmart+ include streaming services at no extra cost

Netflix remains one of the dominant streaming platforms, but its latest price hike underscores a clear shift: streaming is getting more expensive, and consumers may need to be more strategic about what, and how many services they keep.

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Netflix is about to stop working on millions of older devices, including some smart TVs made before 2015 and legacy streaming hardware. The change is rolling out now, with some devices, like the PlayStation 3, losing access starting March 2.

This change reflects a broader industry shift as streaming platforms phase out aging hardware that can't support newer video formats, security updates or app features. Older TVs and devices often lack the processing power and memory needed to run the latest version of the Netflix app.

If your device is affected, Netflix will simply stop working, but you don't necessarily need a new TV to keep watching.

What devices are affected

Not every affected device has been officially listed, but according to Tom's Guide, the phaseout primarily affects older smart TVs and legacy streaming hardware that can no longer support app or security updates. In general, if your device hasn't received software updates in years, it may no longer run Netflix.

Here are the types of devices most commonly reported to be affected:

• Smart TVs manufactured before 2015 (Samsung, LG, Sony, Panasonic)
• Older streaming boxes and DVR-style TV devices
• Legacy gaming consoles like the PlayStation 3
• Some older phones and tablets that can't update to newer operating systems

How to keep streaming without replacing your TV

To keep streaming, your device needs to support newer security standards, typically iOS 16 or later, or Android 7.0 and up. If it doesn't, you'll need to upgrade your streaming setup.

The good news is you don't have to replace your TV. A plug-in streaming device can restore access to Netflix and often improve speed and picture quality at the same time.

These devices connect through your TV's HDMI port and come with regularly updated apps, better performance and ongoing support. Many cost under $30, and sale prices can bring them as low as $15 to $25.

What to do if Netflix stops working

If your device is no longer supported, the simplest fix is to switch how you stream, not replace your TV.

A plug-in streaming device, like a Roku or Fire TV Stick, can restore access in minutes. You can also use a newer game console, laptop or tablet connected via HDMI as a short-term workaround.

Before upgrading, it's worth checking whether your TV has any pending software updates, though most devices affected by this change are no longer eligible for updates.

What this means for viewers

This isn't unusual; streaming services regularly phase out older hardware as technology evolves. What's different this time is the scale, with millions of devices losing support at once.

For most households, the fix is simple: a low-cost streaming stick can keep your current TV in use while giving you access to the latest apps, faster performance and ongoing support.

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Netflix (NFLX) has given long-term investors plenty to cheer about. In the past 15 years, NFLX stock has averaged an annual gain of 28.9%, easily outpacing the S&P 500's 14.8% total return (price change plus dividends). The streaming giant's next move could encourage a new crop of folks to look its way.

After the close on Thursday, October 30, Netflix announced that its board of directors approved a 10-for-1 stock split. It will begin trading on a post-split basis at the open today, November 17.

This marks the third stock split for Netflix: A 2-for-1 split on February 11, 2004, and then a 7-for-1 on July 14, 2015.

"The purpose of the stock split is to reset the market price of the company's common stock to a range that will be more accessible to employees who participate in the Company's stock option program," Netflix said in its press release.

Shares closed at $1,154.23 on Friday, November 14, a price point that's out of reach for most retail investors.

What does the Netflix stock split mean?

As for Netflix's stock split, it won't change anything about the company's fundamentals or market valuation. Rather, a stock split is similar to making change. In NFLX's case, it will be equivalent to breaking a $10 bill into 10 $1 bills.

Based on NFLX's November 14 close, the 10-for-1 stock split brings the share price to just over $111 at Monday's opening bell. This makes it much more attractive for retail investors, as well as Netflix employees participating in the company's stock purchase plan who were unable to buy NFLX stock at its former four-figure share price.

O'Reilly Automotive (ORLY) underwent a similar stock split earlier this year. The auto parts retailer cited the importance of keeping its share "more accessible to team members and investors" as the reason behind its 15-for-1 split. Financial firm Interactive Brokers (IBKR) also split its stock recently.

Wall Street says Netflix stock's still a buy

Netflix gapped lower in October after the streaming company missed third-quarter earnings expectations due to an expense related to an ongoing dispute with Brazilian tax authorities, but analysts don't seem too concerned.

"Netflix's Q3 results and Q4 guidance underwhelmed investors after several quarters of phenomenal results," said Wedbush analyst Alicia Reese. "With much still to prove, we think Netflix is positioning for substantial growth in global advertising, and that should not be overlooked."

Reese added that recent data checks suggest subscriber growth is continuing and price hikes are being absorbed with little resistance. Plus, "Netflix continues to enhance its ad business by expanding partnerships, improving targeting, and adding more live content. We expect ad revenue to become Netflix's primary revenue driver beginning in 2026, with significant opportunities in 2027."

Reese has an Outperform (Buy) rating on Netflix stock and she's hardly alone in her bullish outlook toward the communication services stock.

Of the 49 analysts covering Netflix stock tracked by S&P Global Market Intelligence, 26 say it's a Strong Buy, eight have it at Buy, 13 rate it a Hold and two have it at Strong Sell. This works out to a consensus Buy rating.

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Netflix (NFLX) stock surged out of the gate Wednesday after the streaming giant beat top- and bottom-line expectations for its fourth quarter and announced a price hike on certain subscription tiers.

In the three months ending December 31, Netflix said its revenue increased 16% year over year to $10.25 billion, boosted by global streaming paid memberships that were 15.9% higher to 301.6 million. Its earnings per share (EPS) more than doubled from the year-ago period to $4.27.

The results cruised past analysts' expectations. Wall Street was anticipating revenue of $10.1 billion, earnings of $4.20 per share and paid memberships of 290.9 million, according to CNBC.

For the first quarter of 2025, Netflix said it expects to achieve revenue of approximately $10.4 billion and earnings of roughly $5.58 per share. For the full year, the company raised its revenue expectations by about $500 million to a range of $43.5 billion to $44.5 billion. This represents growth of about 14% to 17% over 2024.

"We enter 2025 with strong momentum, coming off a year with record net additions (41 million) and having re-accelerated growth (16% increase in revenue)," Netflix said. "Moreover, we're in a leadership position in terms of engagement (approximately two hours per paid membership per day), revenue ($39 billion), and profit ($10 billion in operating income) in a market that is continuing to expand."

Netflix is raising prices on certain tiers

Netflix also said it is raising prices on some of its services, according to CNBC. Here's a breakdown of where the increases are occurring and by how much:

• Standard plan without commercials: $17.99 (from $15.49)
• Ad-supported plan: $7.99 (from $6.99)
• Premium plan: $24.99 (from $23.99)

"When you're going to ask for a price increase, you better make sure you have the goods and the engagement to back it up," said Netflix Co-CEO Ted Sarandos said on the company's conference call. "And I feel like what we have going into 2025 is just that."

Netflix's last series of price hikes came in October 2023.

Is NFLX stock a buy, sell or hold?

Netflix has been one of the best stocks for buy-and-hold investors and this impressive price action has been on full display over the past 12 months. Indeed, NFLX share have doubled in value over the past 12 months vs the S&P 500's 26% gain. Unsurprisingly, Wall Street is bullish on the blue chip stock.

According to S&P Global Market Intelligence, the average analyst target price for NFLX stock is $1,020.70, representing implied upside of about 5% to current levels. Additionally, the consensus recommendation is a Buy.

Financial services firm Wedbush is one of the most bullish outfits on NFLX stock and raised its price target to $1,150 from $950 after earnings and maintained its Buy rating.

"While massive subscriber growth was the primary driver in 2024, we expect price increases to drive revenue growth in 2025 and the ad tier to drive revenue higher in 2026," wrote Wedbush analyst Alicia Reese in a January 22 note. "We think Netflix can maintain high-quality production given its healthy cash position against competitors who have to tread more carefully to achieve or maintain some level of profitability."

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A strong start to third-quarter earnings season went into overdrive, boosted by shares in many of the Magnificent 7 stocks that have done much of the bull market's heavy lifting.

Communications services and tech names led the market higher Friday, helped by two of its largest stocks. Shares in Apple (AAPL) gained 1.2% on strong demand for its new iPhone in the Chinese market. Meanwhile, Nvidia (NVDA) rose another 0.8% after analysts at BofA Global Research raised their price target on the stock.

Additional stimulus measures from the People's Bank of China also helped equities catch a bid on Friday, notes José Torres, senior economist at InterActive Brokers. At the closing bell, the blue chip Dow Jones Industrial Average rose almost 1% to 43,275, a new closing high, while the broader S&P 500 added 0.4% to 5,864. The tech-heavy Nasdaq Composite added 0.6% to finish at 18,489.

Housing starts in focus

Housing starts declined 0.5% in September from the prior month to a seasonally adjusted annual rate of 1.35 million, according to the U.S. Census Bureau. Meanwhile, building permits declined 2.9% to a seasonally adjusted annual rate of 1.42 million.

Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, described the decline in starts as "trivial," and believes new residential construction is likely to flatline.

"The boom-and-bust cycle in multi-family construction, which tracked the surge and then retreat in rental growth during the pandemic, has now faded entirely," Allen writes. "This points to new residential construction having a roughly neutral, at best, impact on overall GDP growth over the next few quarters."

Stocks on the move

CVS Health (CVS) stock fell 5.2% after the healthcare company announced the appointment of a new CEO. David Joyner took over as president and CEO of CVS Health effective October 17. He replaced Karen Lynch, who had been in the position since February 2021.

The news comes less than three weeks after reports surfaced that CVS was conducting a strategic review of its business and had hired bankers to assist in exploring options, including a possible breakup of its retail pharmacy and Aetna insurance units.

Shares in CVS have lost about a quarter of their value so far this year to lag the broader market by almost 50 percentage points. Worse, CVS stock has underperformed the S&P 500 by wide margins over pretty much every standardized return period you care to measure.

American Express (AXP) stock slid 3.2% after the payments company reported mixed results for its third quarter and raised its full-year profit forecast.

As a result of its strong financial performance in the first nine months of 2024, AXP now anticipates earnings per share (EPS) in the range of $13.75 to $14.05, up from its previous forecast of $13.30 to $13.80. It still expects revenue growth of around 9%.

AXP stock is up almost 50% for the year to date, which has some analysts becoming more cautious on the name at such levels. The Dow Jones stock carries a consensus recommendation of Hold, partly as a function of valuation. However, as a long-term investment and dividend payer, AXP has been tough to beat. That's why AXP has been one of Warren Buffett's favorite stocks for half a century.

Netflix (NFLX) stock surged 11.1% after the streaming giant beat on all major metrics for its third quarter (revenue, earnings and paid memberships) and issued a strong outlook for its fourth quarter.

NFLX now anticipates Q4 revenue growth of 15% and paid net additions to be higher than in the third quarter. Given this outlook, Netflix is on pace to grow revenue by 15% for the full year, which is the high end of its previous guidance for revenue growth of 14% to 15%. For 2025, the company anticipates revenue in the range of $43 billion to $44 billion, representing year-over-year growth of 11% to 13% from its 2024 revenue forecast of $38.9 billion.

UBS Research analyst John Hodulik, who rates shares at Buy, said Netflix is "planting the seeds for double-digit growth."

Netflix stock was the S&P 500's top gainer on Friday, but then long-time shareholders should be used to such remunerative – if volatile – returns. Indeed, anyone who put $1,000 into Netflix stock 20 years ago has enjoyed outstanding outperformance.

Wall Street is mostly bullish on the blue chip stock's prospects over the next 12 months or so, too. Per S&P Global Market Intelligence, industry analysts assign NFLX a consensus recommendation of Buy, albeit with somewhat mixed conviction.

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Netflix (NFLX) stock is one of the best S&P 500 stocks Friday after the streaming giant beat top- and bottom-line expectations for its third quarter and issued a strong outlook for its fourth quarter.

In the three months ended September 30, Netflix said its revenue increased 15% year over year to $9.83 billion, driven by a 14% rise in global streaming paid memberships to 282.72 million. Its earnings per share (EPS) were up 45% from the year-ago period to $5.40. 

The results topped analysts' expectations. Wall Street was anticipating revenue of $9.77 billion, paid memberships of 282.15 million and earnings of $5.12 per share, according to CNBC.

For the fourth quarter, Netflix said it anticipates revenue growth of 15% and paid net additions to be higher than in the third quarter. Given this outlook, Netflix is on pace to grow revenue by 15% for the full year, which is the high-end of its previous guidance for revenue growth of 14% to 15%.

"We're pleased that we've reaccelerated our growth and, as we head into 2025, we expect to deliver solid revenue and profit growth by both improving our core series and film offering while investing in new growth initiatives like ads and gaming," NFLX said.

For 2025, the company anticipates revenue in the range of $43 billion to $44 billion, representing year-over-year growth of 11% to 13% from its 2024 revenue forecast of $38.9 billion. Netflix said it expects this growth "to be driven by a healthy increase in paid memberships," as well as an expansion to its average revenue per membership.

Is Netflix stock a buy, sell or hold?

Netflix has outperformed the broader market so far in 2024, up 55% vs the S&P 500's 23% gain. Unsurprisingly, Wall Street is bullish on the blue chip stock. 

According to S&P Global Market Intelligence, the consensus recommendation among the 48 analysts covering the Magnificent 7 stock is a Buy. However, the average analyst target price of $745.21 sits at a slight discount to the current share price. It's likely, though, that analysts will increase their price targets on NFLX following the company's strong earnings report.

Financial services firm Needham already hiked its price target on NFLX, raising it to $800 from $700 after earnings while maintaining its Buy rating.

Needham analyst Laura Martin pointed to Netflix's strong Q3 subscriber adds as well as its solid full-year revenue forecast and higher 2024 free cash flow guidance of $6 billion to $6.5 billion as things she liked in the print. These are all catalysts that can boost NFLX stock's share price down the road, she adds.

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A sharp selloff in tech and communications services stocks weighed on market sentiment Friday, though solid earnings results for a blue chip credit card company kept the Dow Jones Industrial Average above water. And the volatility could continue next week thanks to a barrage of Big Tech earnings and a key inflation update.  

At the close, the Dow was up 0.6% at 37,986 thanks to a post-earnings pop for American Express (AXP). 

Indeed, AXP was the best Dow Jones stock today, surging 6.2%, after the credit card company disclosed higher-than-expected Q1 earnings of $3.33 per share on in-line revenue of $15.8 billion. AXP also said consumer spending was up 8% year-over-year, with spending among millennial and Gen Z cardholders rising 15%.

Looking ahead, Argus Research analyst Stephen Biggar (Buy) sees "continued healthy spending volume from AXP's generally affluent cardmembers, who are less impacted by inflation, and see marketing efforts leading to good cardmember growth."

Netflix sinks after Q1 results

While the Dow managed to notch its third win of the week, the S&P 500 (-0.9% at 4,967) and the Nasdaq Composite (-2.1% at 15,282) extended their daily losing streaks to six.

Weighing on the indexes was a negative earnings reaction for Netflix (NFLX, -9.1%). While the streaming giant reported top- and bottom-line beats in its Q1 results and said subscriber growth was up 16% year-over-year, it said it will stop reporting paid membership growth in fiscal 2025. 

"The market hasn't taken kindly to news Netflix will stop reporting quarterly membership numbers," says Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. The plan was always to grow the company's customer base, but now that it's at that inflection point, "there will be nerves around what this means for Netflix's label as a higher-octane growth stock," she adds.

The weakness wasn't confined to Netflix, though. Ahead of their appearances on next week's earnings calendar, several Magnificent 7 stocks – including Alphabet (GOOGL, -1.2%) and Meta Platforms (META, -4.1%) – pulled back.

Super Micro Computer spirals 20% 

Elsewhere, Super Micro Computer (SMCI) plunged 23% to close at its lowest level since early February. While no concrete news sparked the selloff, media reports suggest investors could be skittish that the company did not preannounce its earnings report as it has done in seven of the past eight quarters. Rather, the AI server, software and infrastructure company said it will release its full fiscal third-quarter results after the close on Tuesday, April 30.

Friday's slump marks a change of pace for the recent S&P 500 addition. To be sure, SMCI has been one of the hottest stocks of 2024, nearly doubling in value for the year to date. As such, some of today's selling could be investors taking profits on the sizzling tech stock.

Inflation data, busy earnings week on deck

Several major events could spark more volatility in the stock market next week. In addition to a number of Big Tech earnings reports, the economic calendar features the March Personal Consumption and Expenditures (PCE) Price Index. The data measures consumer spending and is the Fed's preferred inflation gauge.

Larry Adam, chief investment officer at Raymond James, says investors needn't worry too much about the whipsaw price action. "While market gyrations can be concerning, remember not to panic – pullbacks and interim spikes in volatility are quite common," Adam reminds us, adding that the S&P 500 is still up 20% from its October lows. "This uninterrupted rally is uncommon as it is important to appreciate that the equity market does not go up in a straight line," he says.

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Verizon is offering a new streaming bundle — Netflix Premium and AMC Plus ad-free — for $25.99 per month to customers who subscribe between now and March 31.

This is the first time these streaming services will be offered together, which will save subscribers about $6 per month, Verizon said in announcing the deal. It follows news last December of the telecom's giant's partnership with Netflix and Warner Bros. Discovery  to offer an ad-supported Netflix and Max streaming bundle for $10 per month. 

In addition to its latest bundling news, Verizon said its myPlan customers can take an additional $5 off the offer when they sign up for the monthly +play perk. Plus Play is a content hub that offers customers discounts on various streaming options and let's them browse, buy and manage subscriptions such as video, gaming and lifestyle channels.

So many bundles to choose from 

The offer comes amid an influx of streaming services offering ad-free along with ad-supported options. But streaming bundles are quickly becoming the new norm as the number of streaming options grows along with their costs. 

Streamers that have boosted prices in the last year include Netflix, which hiked monthly prices of its basic plan by $2 last October to $11.99, and the premium plan by $3, to $22.99. Also last year, a Discovery Plus ad-free subscription rose to $8.99, while Disney Plus' ad-free version increased to $13.99, from $10.99.

Meanwhile, Cable and internet companies — including Charter Spectrum, which is planning a streaming bundle with TelevisaUnivision, and T-Mobile, which is adding Hulu to its streaming bundle offerings — are working overtime to attract and retain new customers in the ever-changing landscape.

More reasons to bundle 

Several studies say that bundling can help subscribers save but a new report also says that bundling could help with something else: fatigue. According to a recent study by Bango, a provider of software for bundling subscriptions, customers are growing tired of having to manage myriad subscriptions, with some even saying they would consider leaving them altogether. 

As previously reported, there are a number of other ways to save on your monthly subscription costs. They include rotating your subscriptions, seeking out free trials and looking into pay-per-view options to watch one program you really want to see without committing to an entire subscription.

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Stocks shot higher out of the gate Wednesday, buoyed by a well-received earnings report from streaming giant Netflix (NFLX). Some strong economic data also helped boost equities.  

At the close, the Dow Jones Industrial Average was down 0.3% at 37,806, while the Nasdaq Composite was up 0.4% at 15,481. The S&P 500 gained 0.1% to 4,868, its fourth straight record close. 

Fueling upside in the main indexes was a positive reaction to Netflix's fourth-quarter results. The company reported year-over-year Q4 revenue growth of 12.5% to $8.8 billion, while earnings per share surged to $2.11 from last year's 12 cents. The top-line results came in higher than analysts were expecting, though the bottom-line figure fell short of estimates. 

Despite the bottom-line miss, Netflix stock jumped 10.7% Wednesday thanks to its stellar subscriber numbers. Specifically, the company added 13.1 million new subscribers globally – its biggest fourth quarter ever for subscription growth – easily outpacing its forecast for roughly 8.8 million.

"We enter 2024 with good momentum," Netflix said in its earnings report. For the first quarter, the company forecasts revenue to 13% to $9.2 billion and earnings to be up 56% to $4.49 per share. 

"We thought NFLX might tread water in the first half of 2024 with operating income margins set, paid sharing dwindling and ads scaling," says Wells Fargo analyst Steve Cahall. But the company's "fourth-quarter outperformance indicates there's a lot of growth and margin still ahead."

Meta tops $1 trillion in market value

Elsewhere, Meta Platforms (META) became the latest stock to top $1 trillion in market value. META shares surged 1.4% today, bringing its market cap to $1.004 trillion. Meta's fellow Magnificent 7 stocks Apple (AAPL, -0.4%), Nvidia (NVDA, +2.5%), Alphabet (GOOGL, +1.1%), Amazon.com (AMZN, +0.5%) and Microsoft (MSFT, +0.9%) – which briefly topped a $3 trillion market value today –  are already members of the trillion-dollar club.

Today's upside for META stock comes after Raymond James analyst Josh Beck named it a "top pick," citing "a growing narrative around one of the most compelling generative artificial intelligence (AI) monetization themes across tech unfolding that could scale to $25 billion to $60 billion of incremental revenue."

January PMI data comes in strong

In economic news, S&P Global's flash manufacturing purchasing managers index (PMI) jumped to a 15-month high of 50.3 in January from December's 48.2. Readings above 50 indicate expansion activity. 

The services PMI, which measures activity in the services sector, hit a seven-month high of 52.9 in January.

This morning's PMI data "exceeded forecasts, but tomorrow's gross domestic product (GDP) report and Friday's personal consumption and expenditures (PCE) inflation print are likely to be more impactful on investor sentiment," says José Torres, senior economist at Interactive Brokers. "However, against this backdrop, market participants are expecting the first Fed cut to arrive in May vs March, with robust data serving to extend the journey across the monetary policy bridge."

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Netflix (NFLX) is a key headliner of this week's busy earnings calendar. The streaming giant reported fourth-quarter results after Tuesday's close and based on today's price action for Netflix stock, Wall Street likes what they see.

The company reported year-over-year Q4 revenue growth of 12.5% to $8.8 billion, while earnings per share surged to $2.11 from last year's 12 cents. The top-line results came in higher than analysts were expecting, though the bottom-line figure fell short of estimates. 

Despite the bottom-line miss, Netflix stock jumped more than 10% out of the gate Wednesday thanks to its stellar subscriber numbers. Specifically, the company added 13.1 million new subscribers globally – its biggest fourth quarter ever for subscription growth – easily outpacing its forecast for roughly 8.8 million.

"The meaningful growth in subscriber numbers is partly a result of password sharing crackdowns, but is also testament to Netflix's ability to keep us glued to screens" says Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. "Full year-margin expectations have been upgraded thanks in part to the higher volume of Netflix fans joining the service, and that nugget of news is being celebrated the loudest."

"We enter 2024 with good momentum," Netflix said in its earnings report. For the first quarter, the company forecasts revenue to 13% to $9.2 billion and earnings to be up 56% to $4.49 per share. 

NFLX also expects to spend roughly $17 billion on content in 2024. Part of the company's upcoming programming will include a bigger shift into sports entertainment, including its new 10-year deal with TKO Group Holdings (TKO) that will allow it to stream WWE Raw on its platform beginning in January 2025. 

"We thought NFLX might tread water in the first half of 2024 with operating income margins set, paid sharing dwindling and ads scaling," says Wells Fargo analyst Steve Cahall. But the company's "fourth-quarter outperformance indicates there's a lot of growth and margin still ahead."

Should I buy Netflix stock?

The decision over whether or not to buy a stock is a personal one, dependent on your individual risk tolerance and investing goals. 

However, Wall Street is overwhelmingly bullish on NFLX stock. Of the 50 analysts covering NFLX tracked by S&P Global Market Intelligence, 22 say it's a Strong Buy, six have it at Buy, 16 call it a Hold, two have it at Sell and one says it's a Strong Sell. This works out to a consensus Buy recommendation.

It's unsurprising to see so much optimism surrounding Netflix stock, given its impressive long-term strength. True, shares lost half their value in 2022 as investors fled riskier assets. Still, NFLX bounced back sharply in 2023, surging 65% – including a nearly 30% gain in Q4 alone. Additionally, the FAANG stock has generated an annual total return of 25.1% over the past 20 years vs 9.6% for the S&P 500.

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Verizon has partnered with Netflix and Warner Bros. Discovery to offer an ad-supported Netflix and Max streaming bundle for $10 per month.

The bundle will be available beginning December 7 to Verizon myPlan customers on the Unlimited Welcome, Unlimited Plus or Unlimited Ultimate plans. The bundle will allow customers to save more than 40% of the cost of buying each service separately, Verizon said.

"Verizon is the first provider to offer a bundle of Netflix & Max (with ads), and it’s available to all myPlan customers," the company said in announcing the offering. "Verizon is using its strategic relationships with the biggest players in the content industry to continue to unlock more value for its wireless customers."

This is the second bundle for Verizon, which offers a $10 Disney bundle that includes Disney Plus, Hulu, and ESPN Plus. Combining that plan with the Netflix and Max bundle makes five streaming services available for only $20 per month, Verizon said.

Popularity of bundling grows

The announcement is in line with a recent report from AlixPartners showing that streaming may become less expensive as popularity grows for subscriptions via plans that combine a streaming service with cable TV, broadband or wireless plans  — as opposed to subscribing directly to streaming services. The study found that new streaming subscribers, in particular, are likely to opt for this kind of streaming bundle and that customers can save 20% to 50% by bundling.

Meanwhile, even though some of the biggest streaming platforms have hiked prices since the summer, there are still a variety of ways to help you save on streaming services. These include rotating and switching your service, or taking advantage of free trials.

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• Netflix Hikes Prices Again As Subscriptions Climb

Netflix is raising prices again for certain subscribers, the streaming service announced in its third-quarter earnings report.

Effective immediately, the monthly cost of the Netflix basic plan is $11.99, up $2, and the premium plan is $22.99, up $3. The company also announced price increases in the U.K. and France. Monthly ad-supported and standard plans will remain the same, however, at $6.99 and $15.49, respectively.

The increase is Netflix’s second in less than two years. In January 2022, it raised monthly basic plan prices by $1, to $9.99; the standard plan rose by $2, to $15.49; and the premium plan increased by $2, to $19.99. Netflix only launched its ad-supported service in October 2022.

“As we deliver more value to our members, we occasionally ask them to pay a bit more,” Netflix said in its earnings report. “Our starting price is extremely competitive with other streamers and, at $6.99 per month in the US, for example, it’s much less than the average price of a single movie ticket.”

Netflix, which has been cracking down on password sharing, also said the number of paid subscribers increased by 8.8 million in the third quarter, versus 2.4 million in the same year-ago period. The company credited "the roll out of paid sharing, strong, steady programming and the ongoing expansion of streaming globally” for the subscriber increase. 

Streaming prices on the rise

Netflix is the latest streamer to boost prices. Earlier this month, Warner Bros. Discovery hiked the price for its Discovery Plus ad-free monthly subscription in the U.S. to $8.99, from $6.99, but kept its monthly "ad-light" subscription fee unchanged at $4.99. Last month, Amazon Prime Video announced that its Prime Video streaming service will be getting ads in early 2024, although members can opt for an ad-free version for $2.99 per month.

In August, The Walt Disney Company announced a price hike for its monthly ad-free Disney Plus plan to $13.99, from $10.99, effective October 12. The cost of its monthly ad-free Hulu plan also rose to $17.99, from $14.99. Both versions of these services with ads remained unchanged at $7.99 per month.

News that Netflix was planning to raise rates was initially reported in an October 3 Wall Street Journal report citing sources familiar with the matter. The report said that the company was planning to wait until the actors' strike ended and that it was looking at several other markets worldwide. The actors' strike is ongoing, but the price hike is here nonetheless.

How you can save on your streaming services

With some of the biggest streaming platforms raising rates, you may want to check out other options. For tips on how to save money while making sure you get to watch some of the must-see releases, check out our round-up of how to save on streaming services and find streaming deals.

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Warner Bros. Discovery hiked the price this week for its Discovery Plus ad-free monthly subscription in the U.S. to $8.99, from $6.99, but kept its monthly "ad-light" subscription fee unchanged at $4.99. 

In Canada, a new Discovery Plus ad-free monthly subscription also rose to $8.99 CAD, from $6.99 CAD, and the new ad-lite rate increased to $5.99 CAD, from $4.99 CAD.

According to an October 3 Wall Street Journal report, Netflix could be next. The company plans to raise prices on its ad-free service in the U.S. and Canada a few months after the actors strike ends, and it is looking at several other markets worldwide, according to the report, which cites sources familiar with the situation.

Netflix did not respond to Kiplinger's requests for comment.

These streaming services join several others that recently announced price hikes, especially for ad-free service. These include Amazon, which last month announced plans to add commercials to its Prime Video streaming service in early 2024, unless members opt for an ad-free version for $2.99 per month.

Starting October 12, the Walt Disney Company will boost prices for its monthly ad-free Disney Plus plan to $13.99, from $10.99. The cost of its monthly ad-free Hulu plan will hit $17.99, from $14.99. Both versions of these services with ads will remain unchanged at $7.99 per month.

First increase since 2021

At Warner Bros., the monthly Discovery Plus increase became effective on October 3. The company said in a statement that this is the first increase for the service in the U.S. and Canada since it was launched in January 2021.

"This will allow us to continue to provide can’t-miss stories in the food, home, relationships, true crime, paranormal genres - plus so much more,” Warner Bros. said.

With some of the biggest streaming platforms raising rates, you may want to check out other options. For tips on how to save money while making sure you get to watch some of the must-see releases, check out our round-up of how to save on streaming services and find streaming deals.

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Stocks closed mixed Thursday as investors combed over the latest round of corporate earnings reports. 

While the Dow Jones Industrial Average extended its longest win streak in years thanks to strong results from Johnson & Johnson (JNJ), disappointing reports from Netflix (NFLX) and Tesla (TSLA) sent the Nasdaq Composite tumbling. 

Taking a closer look at the numbers, pharmaceutical giant Johnson & Johnson was easily the best Dow stock today, surging 6.1%. The pop came after JNJ beat on its top and bottom lines, reporting second-quarter revenue of $25.5 billion and earnings of $2.80 per share. The company also lifted its full-year forecast.

On the flip side, Netflix stock fell 8.4% after its quarterly results. While there were lots of positives in the report – a gain of 5.9 million new subscribers thanks to its password-sharing crackdown, an upwardly revised free cash flow forecast due to the dual strikes currently underway by Hollywood actors and writers, and a big profit beat – the company fell short on the top line. Specifically, NFLX reported revenue of $8.2 billion, below both the company forecast and analysts' estimates.

Tesla stock also declined following its Q2 results, ending the day down 9.7%. The electric vehicle (EV) maker reported higher-than-expected earnings of 91 cents per share. Revenue of $24.9 billion also came in above estimates. However, TSLA's gross margins of 18.2% were lower than anticipated, while its operating margin fell to 9.6% from 11.4% in Q1.

On the economic front, initial jobless claims fell by 9,000 last week to a two-month low of 237,000. "Markets are tumbling on fears that reports of a strong labor market alongside weaker earnings will cause the Fed to remain hawkish and push the country into recession in the name of reaching 2% inflation," says José Torres, senior economist at Interactive Brokers.

At the close, the Nasdaq was down 2.1% at 14,063, while the S&P 500 was off 0.7% at 4,534. The Dow, however, finished up 0.5% at 35,225 to mark a ninth straight win, its longest such streak since September 2017. 

EV stocks remain poised for growth

Tesla's second-quarter earnings report certainly disappointed investors, but the company's growth in the electric vehicle space cannot be denied. TSLA has seen its annual earnings per share rise to $4.07 in fiscal 2022 from a per-share loss of 9 cents in fiscal 2018, while revenue nearly quadrupled over that same time frame to $81.5 billion. Plus, Tesla delivered over 466,000 vehicles in Q2 2023, nearly doubling deliveries from the year prior. 

The industry is expected to see accelerated growth over the next decade, too, as more automakers shift to battery-powered vehicles. S&P Global Mobility, for one, believes that by 2030, one in four new passenger vehicles sold will be electric. This will undoubtedly result in impressive growth for electric vehicle manufacturers and their suppliers.

While artificial intelligence (AI) stocks have been the hot topic around Wall Street in recent months, investors seeking out the best growth stocks would be wise to keep an eye on the electric vehicle space. Here, we take a look at some of the best EV stocks to capitalize on the expanding industry.

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Amazon Prime is one of the many subscriptions you likely have and is arguably one of the most popular. It's not hard to see why: It's a no-brainer for the shipping perks alone.

Amazon offers a wide range of benefits for Prime members across its many services, including free shipping on most items, Prime Video, Prime Music, the chance to get deep discounts on thousands of items during Prime Day, which runs from July 8 to July 11.

With Amazon Prime costing you $139 a year for the annual subscription, it's no surprise that consumers are wondering whether Amazon Prime is worth the price.

So, do you still need Amazon Prime? After all, anyone can buy from Amazon, you don't need to be a Prime member, unless you want to participate in Prime Day. You just won't have access to the many perks that come with the service.

Then again, there's a chance you don't even need or want some of those benefits anyway. To that end, we've listed 12 reasons you might want to cancel your Amazon Prime membership.

If you pay your Amazon Prime membership annually (which is the most cost-effective option), you're shelling out $139 each year. If you pay monthly, you'll pay $14.99 per month, or approximately $180/year.

At that price, you might ask yourself, how much are you really using Amazon Prime — and how much value are you gleaning from it?

“Because the membership has so many perks, one might assume that it’s worth it,” says Trae Bodge, smart shopping expert at True Trae. By that same token, if you're new to the service, you can try it out free for 30 days. This is a great way to test-drive the service to see if the perks are worth it to you.

“For me, because I take advantage of many of the benefits, including free two-day shipping for my frequent purchases, and enjoy the video, music and book content, I have no question that it's worth it. But if you do not shop frequently online, or don't use any of the many perks, it may not be.”

Is the membership worth it? Check out the 31 best Amazon Prime benefits to use. There are likely perks you don't even know exist.

Amazon also makes it easy to track how much you've spent and what items you've purchased (a gimmick that also works to Amazon's advantage when you want to reorder an item).

Click on “Returns & Orders” at the top of the Amazon home page after you sign in. It defaults to your orders for the last three months. On that drop-down list, you can choose yearly time frames. You can also search for an item, say pants, and you'll see only those orders.

It's the more frivolous items — the things you probably wouldn't pick up in a physical store or that you wouldn't have picked up without free shipping — that can really add up.

So here's the question? Is having Amazon Prime causing you to spend too much at Amazon throughout the year? That's just one key reason you might ask yourself: “Do I need Amazon Prime?”

Your Prime membership might get you access to free delivery and deals on electronics, groceries, clothing, everyday goods and more, but Amazon isn't the only place selling these products.

Keep an eye on Costco and Sam's Club memberships. Then, there's Walmart+. Similar to Amazon Prime, Walmart+ allows you to buy online and ship many items to your home for free, a choice between two streaming services and fuel discounts at an annual price of $98, much cheaper than Prime.

A Walmart Plus membership also entitles you to a free Paramount Plus membership (Essentials plan) or Peacock's ad-supported plan, gas, and Burger King discounts.

We've previously suggested taking advantage of the 30-day Amazon free trial option as long as you remember to quit before the monthly fees kick in — and we stand by this tip.

You're only eligible for one Amazon Prime free trial period every 12 months, so you could wait to sign up and take advantage of Prime Day deals, or join for a month or two (one free, one paid) in the winter to save some money on your holiday shopping.

Do be warned, though: If you cancel Amazon Prime before the free trial period ends, you'll lose access to any of the program's perks immediately, so be certain you don't need any of the Prime member benefits anymore before calling it quits.

Early on, the biggest bonus of a yearly Prime membership was the free two-day (then one-day, and in some places same-day) shipping, which was rare in the retail world. But that's just no longer the case.

Businesses have stepped up their game to stay competitive, with many alternative retailers offering free shipping plans, including Walmart and Target.

These retail giants also offer same-day, or in-store pickup options, that don't come with an annual $139 (or more) price tag. Both retailers have invested significantly in making drive-up pick-up easy and convenient.

“Walmart's and Target's drive-up, pick-up options provide same-day purchase convenience without having to go in the store,” says consumer savings expert Andrea Woroch. “If you need to buy something urgently, like diapers or milk, choose drive-up or pick-up options when ordering from big box retailers like Walmart and Target. This doesn't cost extra!”

Woroch makes another important point: “Not everything you need or want to buy is sold and shipped by Amazon, so it may not be available for Prime two-day shipping anyway. That means it will likely take longer to arrive in the mail. Plus, returns are often much more of a pain to deal with when they come from a third-party retailer.”

Prime's most obvious benefit is free shipping; everyone knows that. But did you know that everyone can get free shipping on Amazon — without paying the $139 a year?

“Amazon has a $35 free shipping threshold for non-Prime members,” says Trae Bodge. “If you tend to buy items over $35 or you are patient enough to combine several items into one order, do you need to pay $139 per year [for Prime membership]?”

There's another potential benefit from shopping this way; if you wait until there's at least $35 worth of items in your basket, you might cut down on impulse buys.

You can also use the Subscribe and Save program. Not only can you save on many items you use often, but you don't have to be a member to receive free shipping.

Do you own any Amazon devices? And if so, how much of their software do you use? I'm on my second Kindle reader, and I've yet to download any free publications from Prime Reading or Amazon First Reads to my device. Not to mention, if you have an older Kindle, Amazon may not support it.

The same can be said in our household for Prime Video, Amazon's streaming service. As with any service in this ever-expanding market, Prime Video has its own originals like Reacher, The Fallout, Invincible, The Chosen, and The Boys (to name a few), but you can likely find plenty of entertainment elsewhere. And, there are other, cheaper ways to get your reading and viewing fix.

“You can stream TV shows, movies and get audio/ebooks for free from your local library's digital platform,” said Woroch. “Just apply for a library card online and forget Prime Video.”

And if you're only signed up to Amazon Prime to stream the latest movies and shows on Prime Video, you could always consider just signing up for the standalone Prime Video membership option ($8.99/month, or $107.88/annually) instead.

If you want to watch Prime Video without ads, you'll have to fork out another $4.99 per month on top of the monthly price.

Amazon Photos offers unlimited cloud storage for all of your photos, a Prime perk that Amazon is constantly pushing.

“Unlimited” is pretty good — Amazon users without Prime only get 5GB of free storage — but if you're like me and you are already utilizing the Apple cloud for photo storage, Prime's offer would be redundant

You can also use Google Photos. You only get 15 GB of Google Cloud storage. But if you're a Google One member, you may get additional storage. Keep in mind, if you're inactive in Google Photos for two or more years, or if you're out of storage, your Photos content may be deleted.

Other cloud-based services offer ample photo storage for less:

Here's another big drawback to Amazon Photos. If you've taken advantage of that service and decide to cancel your Amazon Prime membership, you could, according to Amazon’s service agreement, lose some of your stored photos.

“If you exceed your Service Plan's storage limit, including by downgrading or not renewing your Service Plan or no longer qualifying for an Additional Benefit,” the policy states, “we may delete or restrict access to your files. We may impose other restrictions on use of the Service.”

In the past, Amazon tacked on a monthly $14.99 charge (even for Prime members) for its Amazon Fresh grocery delivery service. That charge was lifted, but the free delivery threshold is back for smaller orders.

Orders over $100 with a two-hour delivery window are free with a Prime membership. Customers will be charged a $9.95 fee for orders under $50 and a $6.95 fee for orders between $50 to $100.

Customers who are not Prime members will be charged $4.95 to $13.95, depending on basket size and the delivery window.

Also, per Amazon, free grocery delivery is only available to "Prime members in select regions on Amazon Fresh orders that meet the local free delivery threshold.” So you'll need to sign into your account or look up your zip code to see if you're in an eligible area.

The good news is that Amazon continues to expand its grocery service. Amazon Now delivers orders in select cities, such as Atlanta, Seattle and Dallas, within 30 minutes. Same-day delivery service is available in over 2,300 cities nationwide.

Alexa, Amazon's cloud-based voice service, is already embedded on over 100 million Echo and smart devices, both from Amazon and third-party manufacturers.

While the voice assistant might help you reorder products easily, find your favorite music and even sing you “Happy Birthday,” Alexa has its limitations — and Amazon knows it. That said, Amazon employs scientists who are currently working to develop faster, easier and more accurate information from the device. Plus, the device gets smarter with every interaction.

And while Amazon has revealed plans for new Alexa features, such as more natural conversations and call translation, there's every chance these new perks might not be of interest or relevant to your specific day-to-day rhythm.

Amazon's Prime Early Access Sale was a huge success (Prime members purchased more than 375 million items worldwide and saved more than $2.5 billion). So clearly, we spend an awful lot of money during Prime Day events. But are these sales even worth it?

It's easy to get excited about a sale event, but some of those “deals" are often Amazon's proprietary products and third-party products that likely didn't sell well at full price.

While you can find the odd gem here and there, buyer's remorse can quickly set in. If you're looking for advice on how not to approach these kinds of events, we've listed some reasons you shouldn't shop on Amazon Prime Day.

Moreover, other retailers have also added sales days. Costco, Walmart and Target all have seasonal promotions similar to Prime Days. I browse deals regularly and often find that those offered by Walmart and other retailers tend to be of better value, so comparison shop if you plan to find the best value.

If you're a Prime member, Amazon might be your first port of call for most things. You find the product you're looking for, check out, and move on… but you might not be getting the best value for your money if you shop this way.

“While Amazon has a vast selection and often very good prices, those prices aren't always the lowest,” said Trae Bodge. “If you have a renewal coming up, try installing a browser extension that compares prices on Amazon versus other sites, like Cently from CouponFollow.”

Likewise, Capital One Shopping automatically applies coupons to your cart, gives you price drop notifications, shopping rewards and more and is free to sign up.

Bodge suggests the following strategy to see whether Amazon Prime is really worth it for your regular purchases:

“For your next several orders, pay attention to the Cently alert as you browse. If you're consistently getting the best price on your chosen items on Amazon, you might want to hang onto your Prime membership, but if you find that other sites have better prices on what you're shopping for, think about canceling.”

“You can often find better prices at competitors, and most big-box retailers will even price-match Amazon if they do have a lower price — including Walmart, Target and Best Buy,” says Woroch. “So why pay for Prime when you can get Amazon's low prices at a regular retailer anyway?”

If you can't or don't want to install a browser extension, you can still do your own price comparisons the old-fashioned way. This is particularly valuable when Amazon starts pushing personalized recommendations your way to try and tempt you into picking up additional items.

If you're struggling to make ends meet, you may scoff at Amazon's founder, Jeff Bezos, who transformed the online-only bookstore into the world's biggest online retailer that now sells electronics, household goods, books and basically anything else you can think of.

Amazon has made Bezos an astonishing amount of money, with a total net worth of $284 billion. He's put his wealth to use over the years by acquiring companies such as Audible, Ring and Whole Foods Markets.

Plus, he's snapped up The Washington Post, launched a commercial aerospace venture — Blue Origin — and acquired MGM Movie Studios for a cool $8.5 billion in 2022.

Given how big Amazon is, some consumers might prefer to support smaller, independent or local businesses rather than buy from such a large corporation.

The smartest way to ensure you're getting a fair deal is to buy mostly brand-name products from Amazon. The reason? Because some third-party products are of varying quality.

This is why, if you find an item you like and it isn't through Amazon directly or a brand name you know, you'll want to research the seller. Check their reputation over the past 12 months and read customer reviews.

I recommend starting with the three-star ones. Look for any commonalities in complaints, as this can clue you into problems you might also encounter.

Netflix (NFLX) shareholders sent a clear but largely symbolic message to corporate executives at its annual meeting yesterday — don't ask for a raise. The "say on pay" shareholder proposal failed to pass, meaning investors thought the company's roughly $78 million compensation for the top three executives was unjustified.

The Writers Guild of America (WGA), currently on strike for better pay from platforms like Netflix, lobbied shareholders to vote against the pay raise.

"This excessive sum, paid to just a handful of execs, could pay for Netflix’s annual share of all of WGA’s proposed improvements for writers — twice over," the WGA stated in a Twitter thread.

Netflix's proposed pay packages for 2023 included roughly $40 million for its CEO, Ted Sarandos, and $34.6 million for co-CEO, Greg Peters. The executive chairman, Reed Hastings, would receive $3 million.

"Say on pay" proposals rarely fail

Companies are required to solicit these "say on pay" votes each year, and the vast majority receive at least 50% — typically 90% or greater support for proposed executive pay. But Netflix shareholders have mostly rejected the company's say on pay proposals going back to 2019, and only 27% voted in support of last year's proposal.

Netflix's failure to gain shareholder approval for this year's compensation package is a big deal. Such high executive pay both rankles striking writers and shows the company failed to woo investors to its management strategy. Netflix waged an all-out charm offensive after the failed "say on pay" vote in 2022, hosting two listening tours for investors and preparing a detailed explanation for its pay package.

Writers for Netflix note this failure may impact the company's bottom line, especially as it cracks down on password sharing and ups advertising. As Meredith Stiehm, president of the Writers Guild of America West pointed out in a recent letter to Netflix, a "delay in the writing, production, and release of new content may impact Netflix’s ability to attract and retain subscribers and viewers just as the company asks customers to watch advertising and pay more for its content."

What's next

The Netflix board will meet to parse shareholder votes and determine next steps. In the meantime, Stiehm, of the WGA, sent a similar letter to Comcast.

"Comcast is asking shareholders to give retroactive advisory approval of the company’s 2022 reported executive compensation totaling over $130 million," she wrote. "By contrast, the proposed improvements the WGA currently has on the table would cost Comcast an estimated $34 million per year."

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The Netflix password sharing crackdown is here, and the company expects a lot of unhappy subscribers. Households will have to pay nearly double each month if they want to share their accounts with people outside their households. 

But how many subscribers are we talking about? A new survey suggests it's more than you think.

Netflix password sharing unites subscribers

A just-released survey from Reviews.org reveals some eye-opening stats about American streaming customers. The researchers surveyed 1,000 Americans on their streaming habits and found a landscape marked by streaming burnout, subscriber churn and of course, frequent password sharing. 

Almost 40% of respondents have canceled a streaming service subscription in the past six months in response to elevated household costs. That’s even higher than the previous year's survey that found 25% of Americans were planning to ditch Netflix. 

The survey also reveals that two in five Americans share streaming service logins with people outside of their households. The survey found that over 85% of Americans share their password to Netflix with other people, which is the highest mark among all streaming services.

The next most shared platforms are Hulu (51%), Amazon Prime Video (44%), Max (36%), and Peacock (26%). Paramount+ and Apple TV+ account for less than 25% of password sharing.

Most respondents share passwords with their friends (27.4%), while the next most likely response is sharing with parents (26.7%).

Respondents estimate their average streaming budget is close to $20-$30 per month, which cuts against the likelihood of Netflix subscribers paying nearly double to share passwords. 

Streaming fatigue is real

The Reviews.org team found that many Americans want to simplify their viewing experience. The survey registers a big change in the average number of streaming subscriptions. The average American now subscribes to only two streaming services, down 50% from four subscriptions just six months ago.

Netflix is the most canceled service among Americans, with 21% of respondents unsubscribing in the survey window. It's followed by Hulu (20%), Peacock (14%), and Max (13%).

However, this doesn't mean all those fatigued subscribers simply picked up a book. Over half of Americans joined a new streaming service in the past six months. 

Ultimately, we see a pattern of roughly half of respondents canceling one service, ostensibly to save money, only to pick up a different one shortly thereafter.

Subscribers' most essential streaming

Despite all the angst around Netflix lately, 43% of consumers say Netflix is the one service they can't live without. Hulu (33%) comes in second, while Peacock (26%) is third in subscribers hearts. 

Check out our price chart to see if you can save on your own must-have streaming service:

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The implementation of Netflix password sharing fees last May has paid off for the streaming giant in a big way with major increases in both subscriptions and revenues in its most recent quarter.

The company added 13.1 million subscribers during the fourth quarter — up from 7.7 million in the same year-ago period — largely on the back of its efforts to “monetize sharing.” In addition, Netflix earnings for the quarter soared 12.5% to $8.8 billion.

“Our healthy top-line growth reflects the benefits of paid sharing, our recent price changes and the strength of our underlying business driven by a strong slate,” the company said in its January 23 earnings announcement. 

But the company also signaled that another round of price increases is on the way and said that it plans to phase out its Basic plan for new and rejoining subscribers.

“As we invest in and improve Netflix, we’ll occasionally ask our members to pay a little extra to reflect these improvements, which in turn helps drive the positive flywheel of additional investment to further improve and grow our service,” it said.

Last October, Netflix hiked prices for the second time in less than two years. The current monthly pricing for the Netflix Standard plan with ads is $6.99. Without ads, the Standard plan will run you $15.49 a month and the Premium plan will cost $22.99.

Netflix password sharing changes

 In the January announcement, Netflix also said that it believes it has successfully addressed account sharing, which has created a bigger subscriber base and ensured “that when people enjoy Netflix they pay for the service too.” 

Last May, Netflix officially announced its plan to reduce unauthorized password sharing in the United States among customers who share logins with friends and family outside their household. Netflix announced on its corporate blog that “Your Netflix account is for you and the people you live with — your household.”

The company is cracking down on customers who share their accounts with people outside a single geographic household, introducing an $8 monthly charge in a long-threatened bid to retain customers and stanch a slowdown in subscription growth. Netflix uses location tracking to ensure subscribed users are logged in at a single home subscriber base, which is sure to test users already sensitive to growing threats to their online privacy.

Current customers can buy an extra membership to their main subscription for an additional $7.99 per month.

Since the end of June, Netflix has blocked devices that attempt to access a Netflix account without paying the proper fees, according to TechRadar. Subscribers in a compliant household can keep using the service on the road, like on laptops or hotel TVs, without paying additional fees.

Netflix warned ISP partners of backlash

The Financial Times previously reported that Netflix had alerted internet provider partners in the UK that they should expect angry calls and support questions about the sharing price hike and location tracking features. 

This move suggested that despite Netflix's best efforts, the company predicted a large number of subscribers would only detect the change when Netflix demanded an extra $8 for sharing the account outside their new "home" location.

Time to shop around?

Netflix customers have a few options at hand for dealing with this new account sharing reality. They can pay the extra member fee for $7.99 or get a new account for as little as $6.99. 

Or they can shop around to see what streaming competitors are offering. We've broken down the latest deals below:

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Investors kept a cautious eye trained on the debt ceiling crisis Thursday, but with President Joe Biden not returning from the Group of Seven summit in Japan until Sunday, it's unlikely any deal will be announced before then. 

Still, there was plenty for market participants to take in today, including solid earnings reports from Bath & Body Works (BBWI) and Walmart (WMT). But the stock that stole the show was Netflix (NFLX) after it unveiled impressive numbers for its new ad-tier service. 

On Thursday, the major indexes rallied hard after Biden and House Speaker Kevin McCarthy both expressed optimism that a deal will be made on the debt ceiling. Many experts are hopeful lawmakers will come to a resolution ahead of the "X" date, or the day the U.S. is unable to fulfill its financial obligations. 

"We believe the government has strong incentives to reach resolution on the debt ceiling, although it may not happen until the 11th hour," the Wells Fargo Investment Institute writes in a note to clients.

On the earnings front, Bath & Body Works stock jumped 10.8% after the maker of body care products reported higher-than-expected first-quarter earnings of 33 cents per share on in-line revenue of $1.4 billion. The company also raised its full-year forecast.

Walmart also reported top- and bottom-line beats for its first-quarter results, sending the Dow stock up 1.3%. By the numbers, revenue rose 7.6% year-over-year to $152.3 billion, while earnings increased 13.1% to $1.47 per share. 

"At the headline level, consumer spending has proven resilient, but below the surface, we continue to see signs that customers remain choiceful, particularly in discretionary categories," said John David Rainey, chief financial officer of Walmart, in the company's earnings call. However, weakness in general merchandise items was offset by strength in grocery, where the company continues "to gain share and grow unit volume," the executive added.

"That was about as impressive a quarter as Walmart could have," says David Wagner, portfolio manager at Aptus Capital Advisors. "The company demonstrated strong Q1 results across the board." While there was consumer discretionary softness across electronics, home and apparel, there was also solid growth in average ticket and transactions, particularly at Sam's Club and international locations, Wagner adds.  

Why Netflix stock soared today

Elsewhere, Netflix stock soared 9.2% after the streaming giant said it has 5 million monthly active users on its lower-cost ad-tier subscription level, and that a quarter of new subscribers were signing up for this option that debuted just six months ago. "The signals are promising: engagement on our ads plan is similar to our comparable non-ads plans," said Greg Peters, co-CEO of Netflix, in a press release. "That's critical because it all starts and ends with consumers."

As for the major indexes, the tech-heavy Nasdaq Composite rose 1.5% to 12,688, the broader S&P 500 gained 0.9% to 4,198, and the blue chip Dow Jones Industrial Average added 0.3% to 33,535.

The best cheap stocks to buy

We tend to focus on long-term, buy-and-hold investments at Kiplinger.com, like the kind found in the Berkshire Hathaway equity portfolio or stable blue chip stocks. Still, some market participants love the thrill that comes with playing cheap stocks. 

Sure plenty of folks avoid these lower-cost names because they tend to be more risky and volatile than their higher-priced counterparts – and their fundamentals are typically discouraging too. But others prefer them for their affordability and potential to produce big gains in short order. 

If you do decide to trade cheap stocks, just know that they can fall just as quickly as they can rise, so it's wise to buy them in small amounts with capital that you can afford to lose. 

Netflix (NFLX) stock is notoriously volatile. Shares lost about a quarter of their value over the second half of 2025 alone. And that was before the streaming giant made its $83 billion bid (including debt) for Warner Bros. Discovery (WBD).

While some nimble traders have surely used NFLX's gut-wrenching swings to their advantage over the years, plenty of punters with less fortunate timing have just as assuredly had their faces ripped off.

Happily for the company's truly long-time shareholders, they're in another class entirely.

Those who bought stock in the streaming media giant two decades ago – and then held and held and held through NFLX's many vertiginous ups and downs – have enjoyed outstanding returns vs the broader market.

As successful as Netflix has been – and may continue to be – it remains at its core a somewhat insecure business model. (Just look at NFLX stock's volatility for proof.)

On the plus side, Netflix is the king of on-demand streaming entertainment, serving TV series, films and games via 300 million paid memberships in more than 30 languages and 190 countries. It furthermore lays claim to arguably the best brand in the industry.

On the downside, Wall Street puts relentless pressure on the company to grow its subscriber base. As a consequence, Netflix must spend tens of billions of dollars on content to attract and retain viewers.

Competition from the likes of Walt Disney (DIS), Apple (AAPL), Paramount (PSKY), Amazon.com (AMZN) and others have forced Netflix to splurge on efforts to acquire, license and produce content over the past several years.

After peaking at $17.7 billion in 2021 – a whopping 50% increase vs the previous year – Netflix managed to cut spending on content.

The company spent about $13 billion on content in 2023, another $16 billion for programming in 2024 and plans to spend $18 billion in 2025.

Investors are counting on the company to keep leveraging those investments into the kind of outsized subscriber growth NFLX enjoyed at the tail end of last year.

After all, nothing hurts NFLX stock like losing subscribers. Recall that in April 2022, shares plunged after Netflix reported its first loss of subscribers in more than a decade. The company shed in excess of $50 billion in market value overnight.

It's also worth recalling that Netflix stock was already in a steep decline at that point. Sluggish subscriber growth and rising costs had long knocked it off its perch. Indeed, shares topped out above a post-split peak of $69 back in November 2021 before plummeting below the $20 price point by mid-2022. (Netflix underwent a 10-for-1 stock split in November 2025.)

The bottom line on Netflix stock?

Which brings us to what you would have today if you had invested $1,000 in Netflix stock 20 years ago.

The good news is NFLX stock has clobbered the broader market over the long term, generating an annualized total return of 31.9% over the past two decades vs 11% for the S&P 500.

Netflix stock also outperforms the broader market over every standardized time frame past one year.

To see what these sort of returns look like on a brokerage statement, check out the chart below.

If you put $1,000 in NFLX stock 20 years ago, today it would be worth about $253,000.

By comparison, $1,000 invested in the S&P 500 over the same time frame would theoretically be worth about $8,000 today. (The broader market's return includes dividends, which Netflix doesn't pay.)

As for where Netflix goes over the next 12 to 18 months, the Street's consensus recommendation on this communication services stock is highly bullish.

Of the 45 analysts issuing opinions on NFLX stock surveyed by S&P Global Market Intelligence, 23 rate it at Strong Buy, eight say Buy, 12 call it a Hold, one rates it at Sell and one says Strong Sell. That works out to a consensus recommendation of Buy, with high conviction to boot.

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Netflix is feeling the heat. Since 2020, the global streaming giant has slowly returned to the pack, after previously dominating the market throughout the 2010s. Despite viral hits like Stranger Things and Wednesday, Netflix continues to cede ground in the streaming wars to rivals including Disney Plus, HBO Max, and Apple TV Plus. We've got more on Netflix’s steady market share decline and what that means for streaming customers. 

Netflix market share falls back to earth

Based on data from the streaming guide JustWatch.com, Netflix has lost 13% of its streaming video-on-demand (VOD) market share to competitors since January 2020. The following chart demonstrates steadily declining interest in Netflix programming among 30 million JustWatch users in 120+ countries, over the past three years. As search volume for Netflix content wanes, interest is increasing steadily in Disney Plus, HBO Max, and Apple TV Plus.

Netflix’s market share among JustWatch users has declined from roughly 46% to 33% since January 2020. Disney Plus has risen from 10% to roughly 18%. After its May 2020 launch, HBO Max has increased from 0% to nearly 10% market share. Apple TV Plus has increased from 4% to 6%. Meanwhile, Amazon Prime Video and “other” services like Hulu and Peacock have either stayed flat or declined slightly in market share. 

To cut costs in the face of mounting challenges, Netflix launched two rounds of layoffs in 2022, firing a total of 450 employees across the United States. According to Variety, these cuts amounted to roughly 4% of its roughly 11,000 global employees. Despite that, Netflix maintained an aggressive $17 billion budget for new content in 2022, matching its 2021 content spending.

Netflix subscription deals

ABC News reports that Netflix lost nearly 1.2 million subscribers during the first half of 2022. This dramatic loss drove the company to introduce an ad-supported subscription plan that costs $7 per month in the U.S. The new price point is less than half the price of its most popular plan. This ad-supported option has proved extremely popular at a time of high cost of living, helping Netflix add 10 million subscribers in the second half of 2022.

Netflix also recently cut subscription prices in 30 of its smaller markets to lure customers back. These Middle Eastern, Eastern European, and Sub-Saharan African countries represent a small part of Netflix’s overall business, but product and pricing tests in smaller markets often make their way to larger markets like the U.S. later.

Competitor streaming deals

• HBO Max jumped into the price cuts game in 2022 by offering a 40% discount for a year's subscription to new and returning customers. The deals came after parent company Warner Bros. Discovery announced they would merge HBO Max and Discovery Plus into one combined streaming service by mid-2023. Although they may be back-tracking on that plan now...
• Disney Plus followed Netflix with its own ad-supported packages at $7.99 a month in December 2022. Disney launched major changes — including bringing back legendary former CEO Bob Iger — in a bid to boost revenue in the face of Disney Plus’ profitability problem. 
• Apple TV Plus has sought to undercut Netflix and others with high-gloss content at a surprisingly low price. A monthly subscription with no ads currently sits at $6.99, making it the cheapest ad-free streaming experience. Apple offers various promotions for Apple TV Plus, including a free year with major Apple product purchases, as well as a similar deal for LG Smart TV owners.
• Meanwhile, Amazon Prime Video still offers probably the best streaming deal on the market, at the cost of free with an Amazon Prime subscription. Surprisingly, this package deal has made Prime Video the most subscribed-to streaming service in the U.S., according to data from streaming service tracker FlixPatrol.

Netflix password crackdown

Netflix’s dropping market share and increased sector competition necessitate higher programming and marketing costs to stay ahead of its rivals. Netflix is searching for ways to increase revenue, without driving off customers by dramatically increasing monthly subscription fees. So Netflix has moved to address its longtime “free rider” problem with a password-sharing crackdown on accounts logged in outside a subscriber’s geographical household. 

Since March 2022, Netflix has rolled out several tests of its new “Paid Sharing” feature in several markets outside the United States, according to CBS News. The program uses technology to track user IP addresses and logins to nudge chronic password sharers into paying for the service. 

Up to 30 million users in the U.S. and Canada, and 100 million globally, will be affected once the program goes live in all Netflix markets by mid-2023.

The bottom line

Netflix’s market share woes have led to attractive deals for streaming video customers, as well as higher costs for chronic password sharers. Expect Netflix and other streaming giants to make more moves to keep subscribers happy, as Americans incur increasing household debt and evaluate their discretionary spending in light of persistent inflation.

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It looks as though the days of Netflix password sharing are numbered, as the streaming giant has apparently had enough of people splitting their accounts with friends and family that don’t live in their households. Netflix has indicated it will soon introduce a new system that will block certain types of password sharing in order to protect its bottom line, perhaps even monitoring your home Wi-Fi network usage. 

The streaming giant appears well aware the new password regime will be unpopular with many users, but it's determined to follow through anyway. So when will this shift happen, and what can you do if you're among the 100 million affected users?

Netflix password sharing: Why the crackdown?

Netflix has always disliked password sharing from a revenue perspective — they’d much rather have every user pay them for an individual account. According to the Wall Street Journal (WSJ), Netflix identified password sharing as a major revenue sink as far back as 2019, but company leadership was concerned about possible user backlash to any changes. 

The issue of password sharing sat on the back burner until early 2022, when Netflix suddenly faced stronger streaming competition (from the likes of Disney Plus and Amazon's Prime Video), hefty content creation expenses, and, the real kicker, dropping almost a million subscribers post-pandemic. 

So, along with innovations like introducing a new subscription plan with ads,  Netflix felt it had no choice but to claw back some much-needed revenue by cracking down on password sharing across all global markets. Since March 2022, the company has since rolled out several tests of its new “Paid Sharing” feature in several markets outside the United States, according to CBS News. Reports from these countries suggest a slow ramping up effort to deter password sharing —relying on technology and user conscientiousness to nudge chronic password-sharers into paying for the service. 

In a January 19, 2023 letter to shareholders, Netflix backed up its Paid Sharing rollout with the explanation that “today’s widespread account sharing (100M+ households) undermines our long-term ability to invest in and improve Netflix, as well as build our business.” 

WSJ reported that there are about 30 million password sharers in the U.S. and Canada, representing $721 million in additional revenue for Netflix from those markets alone under the new Paid Sharing regime. 

When will the password crackdown happen?

In its January 2023 shareholder letter, Netflix explained that Paid Sharing will roll out in its remaining global markets “later in Q1” — which meant at the time these password sharing changes would kick in for affected U.S. users by the end of March 2023. 

However, on May 18, TechRadar reported that Netflix had kicked the can to the end of June 2023 for full implementation, ostensibly to better soften the ground for the Paid Sharing rollout. The Financial Times recently reported that Netflix has been discreetly warning its internet provider partners in the UK that they should "expect angry calls and support questions." So the streaming giant is aware of the coming subscriber backlash - and they're ready to plow through it nonetheless.

And earlier today, Netflix posted on its official blog that it had begun emailing all U.S. subscribers sharing Netflix outside their household in the United States with the following message:

"Your Netflix account is for you and the people you live with - your household...If you want to share Netflix with someone outside your household, you can transfer a profile to a new membership that they pay for, or share your Netflix account with someone who doesn't live with you for $7.99/month more."

Netflix rolled out several related changes on February 8th in Canada, as well as Portugal, Spain and New Zealand. Going forward, passwords and accounts will be for one household and one primary location. You can still share passwords, but only with up to two people you don’t live with, at the cost of the equivalent of U.S. $5.88 extra per person.

Subscriber numbers from the Canadian market show that the password crackdown may be having a significant effect on user signups. Bank of America securities analyst  Jessica Reif Ehrlich expects Netflix's first quarter Canadian subscriber numbers to soundly beat expectations of 100,00, based on surprising third party data, according to MarketWatch. Ehrlich predicts "a greater number of subs and revenue as primary account holders or those sharing accounts become full subscribers." 

Shorter version: The password crackdown is good for shareholders, but not so good for account holders. 

What Netflix users can expect

Netflix FAQs state that the company will use "IP addresses, device IDs, and account activity from devices signed into the Netflix account" to determine which devices are in the same household. It also says “People who do not live in your household will need to use their own account to watch Netflix,” but that “Netflix will not automatically charge you if you share your account with someone who doesn’t live with you.”

If you’re the account holder lending out your password, you won’t get a bill or have your programming disrupted. But if you’re the one free riding on the account, Netflix will first use various technical signposts to determine if you actually live in the house. The page's FAQ page lists the following process for regularly verifying users logged in outside the account's home address: 

"To verify a device:

1. Netflix sends a link to the email address or phone number associated with the primary account owner.
2. The link opens a page with a 4-digit verification code.
3. The code needs to be entered on the device that requested it within 15 minutes.
   • If the code expired, you will need to request a new verification code from the device.
4. Once successful, that device can be used to watch Netflix.
5. Device verification may be required periodically."

If the platform determines that you don’t live there, by the end of June 2023 you’ll likely be blocked from signing into the shared account. That is until you or the account holder pay a small fee to keep sharing.

Be ready for confusion and technical glitches, too. Global tech site Rest of World reported that Netflix’s 2022 Paid Sharing test in Peru was a big mess. Many Peruvian users were able to avoid the extra charges, while others were prompted to pay more and responded by canceling their accounts.

On January 31st, 2023, Netflix updated its FAQ page with new details on the password sharing crackdown:

"Who can use a Netflix account: Anyone in your household (those who live with you at your primary location) can use your Netflix account. To ensure that your devices are associated with your primary location, connect to the Wi-Fi at your primary location, open the Netflix app or website, and watch something at least once every 31 days."

This suggestion of having to return to a home Wi-Fi network once a month to simply continue to use Netflix prompted anger from people who travel for work, college students living away from home, people with multiple homes. Netflix has since removed the update from the FAQ page. A company spokesperson told The Streamable that the latest update was a mistake and that the aforementioned Wi-Fi network policy only applies to the Chile, Costa Rica, and Peru markets.

Still, it's hard to ignore the writing on the wall.

What affected Netflix users can do

The 100 million password borrowers users worldwide (and 30 million in North America) who suddenly find themselves blocked from their favorite Netflix shows have a few options: 

• Buy an extra member slot for each out of household user for $7.99 per month. 
• Get your own Netflix account, starting with the “Basic with ads” plan for just $6.99 per month.
• Switch to a competing streaming service that doesn’t look over your shoulder... Yet. Disney Plus offers reasonable monthly packages and doesn’t crack down on password sharing - yet. Ditto Amazon Prime Video, which is probably the best streaming deal on the market, at the cost of free with Amazon Prime.

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Stocks ended the week on a high note. And while the buying was widespread on Friday, tech stocks were the clear winner as investors cheered impressive subscriber growth from streaming giant Netflix (NFLX) and news that Google parent Alphabet (GOOGL) is undergoing its biggest round of layoffs ever. 

Last night, Netflix reported fourth-quarter earnings of 12 cents per share, much lower than the 45 cents per share analysts were expecting, due to forex headwinds. Revenue of $7.85 billion matched the consensus estimate. But the real number investors were looking for was the subscriber growth, and Netflix blew that out of the water. Specifically, the company added 7.66 million paid subscribers over the three-month period – a time frame that included the launch of a lower-price, ad-supported tier. This compared to Wall Street's expectation for 4.57 million additions. Netflix also said founder Reed Hastings will step down as co-CEO, and will be replaced by Chief Operating Officer Greg Peters. The stock rose 8.5% as a result.

"Netflix has had a show-stopping end to the year, in a performance even its worst critics can't argue with," says Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. "While Wall Street sags with the weight of recession fear and Federal Reserve jitters, Netflix's huge beat on subscriber numbers has injected some much-needed optimism into the mix." 

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Elsewhere in the tech space, Alphabet said it is cutting roughly 12,000 positions, which works out to be about 6% of its global workforce, sending its shares up 5.3%. "Over the past two years we've seen periods of dramatic growth," Sundar Pichai, CEO of Alphabet, wrote in a memo to employees. "To match and fuel that growth, we hired for a different economic reality than the one we face today." This follows similar layoff announcements from several big tech companies in recent months, most notably Amazon.com (AMZN), Meta Platforms (META) and Microsoft (MSFT).

Big gains for Netflix and Alphabet stocks helped the tech-heavy Nasdaq Composite outperform today (+2.7% at 11,140), though the broader S&P 500 (+1.9% at 3,972) and the blue-chip Dow Jones Industrial Average (+1.0% at 33,375) still notched robust gains. 

3 Hot Earnings Reports to Watch

So what's in store for next week? Lots of chatter around what the Federal Reserve may or may not do at its upcoming two-day policy meeting, set to kick off on Tuesday, Jan. 31. Ahead of this, Wall Street will get more data on how the economy is holding up amid the central bank's efforts to tame inflation through aggressive interest-rate hikes, with the first reading on fourth-quarter gross domestic product (GDP) due out on Thursday. Additionally, December's personal consumption expenditures (PCE) index – the Fed's preferred measure of inflation that tracks consumer spending – will be released Friday. 

And throughout the week, investors will sift through a jam-packed earnings calendar. Among the notable names set to report quarterly earnings are Dow Jones stocks Microsoft and Visa (V). Electric vehicle maker Tesla (TSLA) is also on the docket. Despite a dismal end of the year for Tesla stock, analysts still expect solid growth in the company's Q4 financial results. 

Wall Street analysts are high on Walt Disney (DIS, $100.43) stock ahead of the media conglomerate's earnings report due after Tuesday's closing bell.

Disney stock, a component of the Dow Jones Industrial Average, is off 35% for  the year-to-date, hurt by everything from inflation and recession fears to the streaming wars and lockdowns in China.

But analysts say the selloff has made Disney stock a long-term bargain at current levels. And they are especially keen to see what the company has to say about its streaming and theme parks businesses.

Disney+ is an important driver of the company's long-term growth, analysts note. Netflix's (NFLX) subscriber stumble earlier this year – and NFLX's big third-quarter rebound – only underscore how volatile the streaming business can be.

"The fierce competition over subscribers in the sector is at fever-pitch, and high inflation means convincing customers to stay logged in is a tall order," writes Hargreaves Lansdown analyst Sophie Lund-Yates. "That's something Netflix knows only too well."

Meanwhile, although strong U.S. consumer spending and pent-up demand for travel bode well for Disney's theme parks business, COVID-19 lockdowns in China have shuttered Shanghai Disney. 

The bottom line is that analysts forecast Disney to report adjusted quarterly earnings per share (EPS) of 56 cents, up from year-ago adjusted earnings of 38 cents per share, according to S&P Global Market Intelligence.

Revenue is projected to rise to $21.4 billion from $18.5 billion a year ago, driven by growth in the streaming and theme parks divisions.

A nasty surprise or two in the Disney earnings report could change some minds, but for now analysts believe DIS stock has been beaten down beyond reason.

Morgan Stanley analyst Ben Swinburne, for one, estimates that theme parks and streaming will lift Disney's adjusted EPS back above prior peak levels in fiscal 2025. That should support upside of roughly 40% in Disney stock over the next two years, he says.

Swinburne, of course, rates DIS at Overweight (the equivalent of Buy), and he has plenty of company on the Street. Of the 30 analysts issuing opinions on Disney stock tracked by S&P Global Market Intelligence, 18 rate it at Strong Buy, seven say Buy and five call it a Hold.

That works out to a consensus recommendation just shy of Strong Buy, with analysts frequently citing Disney stock's valuation as a key reason to be constructive on the name. 

And shares do indeed look cheap at current levels. 

Disney stock currently changes hands at not-quite 19 times analysts' fiscal 2023 EPS estimate. That's an attractive price to pay for a company expected to grow EPS at an average annual pace of more than 33% over the next three to five years. 

Bullishness abounds in analysts' price targets, as well. With an average price target of $140.08, the Street gives Disney stock implied upside of almost 40% in the next 12 months or so.

Walmart is introducing The Netflix Hub, already active online, into 2,400 of its stores. At The Hub, shoppers can browse items including clothing, collectibles, music, games and seasonal items related to Netflix streaming series and movies. Shoppers can also buy a Netflix Streaming gift card, which will allow its owner to stream top Netflix shows without needing a credit or debit card. It's $19.99 for one month of unlimited service, same as regular Netflix premium service billed to a card. Walmart says that streaming gift card is an exclusive.

The Hub merchandise spins off Netflix hits including the blockbusters Stranger Things and Squid Game as well as The Witcher, Guillermo del Toro’s Pinocchio, Glass Onion: A Knives Out Mystery and more. 

And it’s Stranger Things, with its 1980s setting, that drives the nostalgia vibe at The Hub. Like in the old Blockbuster stores, The Hub will feature a collection of “curated kits” that will feature popcorn, candy and collectible cups. The Stranger Things curated kit is filled with ‘80s-echoing snacks, including Funables fruit snacks and an Icee blue raspberry drink.

You’ll also find Surfer Boy frozen pepperoni pizza and Hawkins Homestyle Eggo frozen waffles (with “Eggo” written upside down, of course), plus clothing, games, greeting cards and toys related to the series. And a Stranger Things Advent calendar and Christmas cards because … actually, we have no idea.

Beyond Stranger Things, how about a 10-pack of Schitt’s Creek women’s low-cut socks? (“Ew, David”!) Perhaps a Netflix Squid Games board game will suit your need for a little “Red Light, Green Light.” And for toddlers, there’s no shortage of CoComelon-related clothing and toys.

The in-store rollout of The Netflix Hub at Walmart comes at a time when Netflix stock appears to be on the mend and subscriber growth is trending upward again. Netflix is also experimenting with a less-expensive ad-supported monthly subscription option. 

Stocks closed lower Wednesday as rising government bond yields offset a round of well-received corporate earnings reports.

On the earnings front, Netflix (NFLX) stock rallied 13.1% after the streaming giant unveiled better-than-expected third-quarter results and gave details on its planned crackdown on password sharing. Additionally, "Netflix's ad-supported tier, the launch of which has been moved up several months, seems to be showing promising signs," says Chris Legg, senior managing director of investment bank Progress Partners. "The savior to long-term negative trends is to pick up new subscribers with the lower cost ($6.99 per month) ad-supported model set to launch next month."

This sentiment is echoed by Wes Gottesman, market advisor at Web3 trading platform TradeZing. "I believe this will be a major hit for budget-conscious consumers, as Netflix proposes they will be adding another 4.5 million subscribers during the first fiscal quarter," Gottesman says. "Not only will Netflix continue to be paid a monthly subscription fee, but they will also generate ad revenue, along with their ad-free tier."

"Netflix also said they will cut down on password sharing," says Doron Gerstel, CEO of global advertising technology firm Perion. "This limiting of access will  mean that consumers who need their 'Netflix fix' are likely to opt for the lower-cost ad-supported model. So the password effort is also a new user harvesting initiative in disguise."

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It wasn't just NFLX gaining ground on solid quarterly results. Consumer staples giant Procter & Gamble (PG, +1.0%) and air carrier United Airlines Holdings (UAL, +5.0%) both jumped on Q3 beats.

However, the major market indexes finished in the red as the 10-year Treasury yield rose 12.9 basis points to 4.127% – its highest level since late 2008. (A basis point = 0.01%.) The Dow Jones Industrial Average fell 0.3% to 30,423, the S&P 500 Index gave back 0.7% to 3,695, and the Nasdaq Composite shed 0.9% to 10,680.

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Earnings will continue to roll in over the next few weeks. In the near term: results from Tesla (TSLA), Snap (SNAP) and American Express (AXP), which are all on this week's earnings calendar. 

"The earnings season floodgates officially opened over the last twenty-four hours. Thus far broadly speaking, like Q2, the numbers have been coming in better than feared," says Michael Reinking, senior market strategist at the New York Stock Exchange. "It is still early but we are not seeing the widespread guidance cuts that markets were looking for and it seems like we are once again kicking the can down the road to next quarter (if it does in fact eventually happen)." 

And with expectations so low that companies are actually beating them, this could result in short-term upside for stocks. That was certainly the case with several big bank stocks, as well as Netflix. But what about the lesser-known names? The stock market is rife with undiscovered gems boasting stable fundamentals and solid growth prospects. Here, we take a look at 10 of the best ones.  

It appears that reports of Netflix's (NFLX, $275.13) demise were greatly exaggerated.

Netflix stock gapped up more than 15% in early Wednesday's trading after the streaming leader easily topped both Wall Street's and its own forecast for subscriber growth. 

The market pretty much always overreacts, both to the upside and downside, in the immediate aftermath of news events like earnings. But there's no doubt Hollywood is breathing a huge sigh of relief on the subscriber news – to say nothing of long-suffering Netflix shareholders.

NFLX has always been an exceedingly volatile stock, but the current drawdown has been longer and steeper than most. Shares hit a closing peak of $691.69 on Nov. 17, 2021 and had lost 65% of their value before Wednesday's rally.

The fact that Netflix stock traded essentially sideways since its disastrous April earnings release – the one in which the company disclosed its first loss of subscribers in a decade – leaves open the possibility that this latest report could be just the catalyst the stock needs to start grinding higher again.

At least that's what the NFLX bulls contend. They're pinning their hopes on the company's launch of a lower priced, ad-supported tier of service and a crackdown on password sharing.

What the Pros Are Saying

Deutsche Bank analyst Bryan Kraft, for one, upgraded Netflix to Buy from Hold, and raised his price target to $350, in response to the quarterly results.

"We believe we now have visibility into a subscriber growth inflection point next year given that Netflix management has confirmed both the early 2023 introduction of its new measures designed to better monetize account sharing, and the early November timing of its AVOD tier launch in 12 top markets," writes Kraft in a note to clients. "The 100 million 'account borrowers' Netflix has counted represent a clear and present growth opportunity that Netflix will soon be in a position to exploit."

Other analysts, while encouraged by management's initiatives, were less impressed, and remain concerned about intense industry competition and looming recession next year.

"While investor optimism is built with respect to the ad supported tier (correlated with the recent stock outperformance in the run-up to Q3 earnings), we still see an elevated competitive industry level against a post-pandemic backdrop while a potential for a weaker consumer spending dynamic remains into 2023," writes Goldman Sachs analyst Eric Sheridan, who slaps a rare Sell recommendation on the stock. 

Splitting the difference is Raymond James analyst Andrew Marok, who, like most of the Street, rates Netflix stock at Market Perform (the equivalent of Hold). 

"This quarter's report goes a long way toward calming fears spurred by first-half 2022 subscriber declines," notes Marok. "While we still have some reservations around the scaling of new monetization initiatives and the competitive environment, the path to upside looks more feasible now than three months ago."

As noted, Raymond James is very much in the majority on the Street. Of the 42 analysts issuing opinions on NFLX tracked by S&P Global Market Intelligence, 22 call it a Hold. Of the remaining analysts, 14 rate it at Strong Buy, one says Buy, three call it a Sell and two have it at Strong Sell.

That works out to a consensus recommendation of Buy, albeit with mixed conviction. And we'll have to wait and see how NFLX recommendations shake out over the next few days. After Wednesday's rally, Netflix stock shot past the Street's average target price of $261.33. 

As for the valuation, the stock does appear compellingly priced on a forward earnings basis. Shares in Netflix change hands at less than 24 times analysts' 2023 earnings per share (EPS) estimate. That's not a bad price to pay for a company expected to generate average annual EPS growth of 24% over the next three to five years.

Valuation, however, only tends to work its magic over the longer term. If you go by the wisdom of the analyst crowd, the outlook for Netflix over the next 12 to 18 months is something of a coin flip. 

The Bottom Line

The good news is that the bottom for Netflix stock looks to be solidly in the rearview mirror. Whether shares can get back to their market-beating ways over the intermediate term remains to be seen.

That said, Netflix is armed with a credible plan to reinvigorate growth, and some early results to back it up. If nothing else, the outlook for NFLX stock hasn't been this bright in a while. 

If that ever-growing cable and streaming services bill has you thinking twice, the latest news out of media giant Warner Bros. Discovery may put you over the edge – and considering cutting back on your media consumption.

Right now, Warner Bros. Discovery has two streaming services as it competes against Netflix, Disney+ and others: Discovery + and HBO Max. By summer 2023, the two will be folded together. No name has been announced – and neither has a monthly subscription price for the combination.

As it stands now, HBO Max customers pay $9.99-$14.99 a month to get HBO products, including HBO Max, with or without commercials. To fans of newer and classic movies on demand, as well as original scripted continuing and limited series – including “Succession,” “The Flight Attendant,” “Euphoria,” “Station Eleven,” “Hacks” – HBO Max is a haven.

Currently, Discovery+ subscribers pay $4.99 a month (with limited ads) to $6.99 a month (ad-free) for the app. Discovery+ is home to popular HGTV, Food Network, and Discovery channel reality series, as well as Magnolia Network with its shows from fixer-uppers Chip and Joanna Gaines. It is also home to a slew of nature shows as well as paranormal series. Combined, the services have 92 million subscribers.

The merger of the two streaming services HBO Max into Discovery+ was a bombshell announcement in a call about the parent company’s second-quarter earnings. Another announcement that rattled the entertainment world: Warner Bros. Discovery said it was removing “Batgirl” from its release schedule – after spending roughly $90 million in its production.

So how does this all play out for you? It will be a year of waiting and wondering if the combined offering will be worth it to you. Expect scattershot announcements about the new app coming from Warner Bros Discovery. But the announcement of the marriage and Warner Bros. Discovery’s willingness to axe product has series producers on edge, though David Zaslav, CEO of Warner Bros. Discovery, praised the high quality of HBO Max.

Tech stocks were the clear Wall Street winners on Wednesday – thanks to a well-received earnings report from Netflix (NFLX). Its shares added to Tuesday's big gains, jumping 7.4% after the video streaming giant reported a bottom-line beat in the second quarter, as well as a slimmer-than-expected subscriber loss.

And NFLX's strong rally lifted its fellow growth stocks, with names like Amazon.com (AMZN, +3.9%) and Meta Platforms (META, +4.2%) seeing solid upside.

As such, the tech-heavy Nasdaq Composite jumped 1.6% to 11,897 – easily outpacing the S&P 500 Index (+0.6% at 3,959) and the Dow Jones Industrial Average (+0.2% at 31,874) in today's trading.

While most eyes were on Netflix, there were other notable headlines, including a report from the National Association of Realtors that showed sales of existing homes fell 5.4% sequentially in June to a seasonally adjusted rate of 5.12 million. This marked the fifth-straight monthly decline in existing homes sales and the weakest rate since June 2020.

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But home prices rose. Specifically, the median home price in the U.S. rose 13.4% year-over-year in June, to a record $416,000.

"Existing home sales continue to slide as the consumer pulls back amid multi-decade lows in affordability," says Peter Essele, head of portfolio management for Commonwealth Financial Network. "The combined effect of rising financing costs and home prices is starting to have a real impact on the real estate market, with upward price momentum likely to stall in the second half of the year as supply greatly outpaces demand. Budgets are tighter than ever as the consumer combats runaway inflation, and housing is one area that's falling victim to waning demand."

Other news in the stock market today:

• The small-cap Russell 2000 gained 1.6% to 1,827.
• U.S. crude futures fell 0.9% to finish at $99.88 per barrel.
• Gold futures slipped 0.6% to settle at $1,700.20 an ounce.
• Biogen (BIIB) fell 5.8% following its earnings report. In the second quarter, BIIB saw revenue fall 7% year-over-year to $2.6 billion as sales of the company's spinal muscular atrophy (SMA) drug Spinraza declined 14% amid increased competition. Additionally, Biogen's Alzheimer's treatment, Aduhelm, took in just $100,000 in sales over the three-month period, down from $1.6 million in sales one year ago. Still, total revenue beat analysts' consensus estimate, as did BIIB's earnings of $5.25 per share.
• Baker Hughes (BKR) was another post-earnings loser, shedding 8.3% in the wake of its results. The oil and gas equipment company posted adjusted earnings of 11 cents per share, well below the 22 cents per share analysts, on average, were expecting. Revenue of $5.1 billion also fell short of the consensus estimate. "The demand outlook for the next 12 to 18 months is deteriorating, as inflation erodes consumer purchasing power and central banks aggressively raise interest rates to combat inflation," said Lorenzo Simonelli, CEO of Baker Hughes, in the company's press release.

Bitcoin's Back, Baby!

Also drawing attention today was Bitcoin, as the cryptocurrency continued its recent rally. Bitcoin hit a one-month peak of $24,265 today before easing back to the $23,665 price point. (Bitcoin markets don't close; price taken at 4 p.m. ET.) It is now up 26% from its late-June low near $18,800.

"The last week has seen Bitcoin shrug off bouts of risk aversion in the broader markets and then outperform in periods of positivity," says Craig Erlan, senior market analyst at currency data provider OANDA. "Perhaps it's a relief rally at the newsflow not deteriorating further. Or a final push at creating a bottom. Whatever it is, Bitcoin has hit a five-week high and that may start tempting people back in."

The recent volatility in Bitcoin reminds us that it and other digital currencies remain highly speculative assets that only those with strong stomachs for risk should consider. Still, for those who want to get more acquainted with the space, try brushing up on the most popular cryptocurrencies or the top crypto mining stocks.

Investors will also want to learn the ins and outs of decentralized finance, also known as DeFi, which is a growing collection of financial tools built on top of the blockchain, the same technology that powers crypto. Here, we've compiled a "DeFi Dictionary" – a primer to help you become familiar with this new frontier of finance. Check it out.

Karee Venema was long AMZN as of this writing.

First-quarter earnings season keeps rolling on. Headlining this week's earnings calendar will be entertainment giant Walt Disney (DIS, $110.71), oil name Occidental Petroleum (OXY, $62.97) and buy now, pay later company Affirm Holdings (AFRM, $25.04).

Through April 29, the percentage of S&P 500 companies reporting higher-than-expected earnings per share (80%) is above the five-year average (77%). However, the magnitude of the earnings beats (3.4%) is below the five-year average (8.9%), according to John Butters, senior earnings analyst at FactSet.

At the sector level, Butters says industrials and consumer staples have had the highest percentage of earnings beats at 91% and 89%, respectively. At the low end, real estate and consumer discretionary have the smallest amount of companies reporting earnings above estimates at 63% apiece.

Can Earnings Give Walt Disney Stock a Boost?

Walt Disney will report its fiscal second-quarter earnings results after the May 11 close.

It has been a rough stretch for the Dow Jones stock, which is off more than 28% for the year-to-date, but another well-received earnings report could give DIS a boost.

In February, shares popped more than 3% after the company reported higher-than-expected earnings, revenue and Disney+ subscriptions.

Disney's streaming service will be in focus this time around too, especially after Netflix (NFLX) stock sold off sharply when its latest earnings report showed the company's first quarterly subscriber loss since 2011. However, unlike NFLX, Walt Disney "can monetize content through a variety of other channels, like merchandise and theme park revenue," says David Trainer, CEO of Nashville-based investment research firm New Constructs.

And in addition to direct-to-consumer subscriber growth across Disney+, Hulu and ESPN+, which will help DIS stock outperform its peers, BofA Global Research analyst Jessica Reif Ehrlich says the company's theme parks are on the upswing.

"Despite achieving near record results in its fiscal first quarter, international visitors still represent a minimal percentage of total attendance, hotel room occupancy remains well below peak levels as all hotels have not been reopened yet, cruise ship capacity remains below pre-pandemic peaks and parks are still operating below peak capacity levels," Reif writes in a note to clients. "These should all be additional tailwinds over the next 18-24 months."

As for Disney's fiscal second quarter, consensus estimates are for earnings per share (EPS) of $1.06, up 34.2% year-over-year (YoY) and revenue of $18.8 billion (+20.1% YoY).

Occidental Petroleum Earnings in Focus After Big Buffett Buy

Occidental Petroleum has been in the limelight in recent weeks following news that Warren Buffett's Berkshire Hathaway (BRK.B) increased its stake in the energy stock.

OXY first became a member of the Berkshire Hathaway equity portfolio in 2019, but the holding company more recently bought 91 million shares amid Buffett's big spending spree.

The integrated oil and gas company will once again be in the spotlight when it unveils its first-quarter earnings results after Tuesday's close.

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OXY ended 2021 in a strong position, returning to profitability on an annual basis after two years of losses and recording its highest free cash flow – or the money available after a company has met its financial obligations – ever.

The company no longer resembles the debt-ridden firm of fiscal 2020 following its "record-shattering fiscal 2021," says Raymond James analyst John Freeman (Strong Buy).

"Leverage, which stood at around 4.8x at year-end 2020 – nearly double the Raymond James large-cap average – is estimated to fall below 1x by year-end 2022. The company, who remains completely unhedged in fiscal 2022, stands to generate a whopping $12.3 billion in free cash flow on our estimates of production of around 1.6 millions of barrels of oil equivalent per day (in-line with Street)," Freeman adds.

Underscoring this financial strength, analysts, on average, are expecting OXY to report earnings of $2.03 per share in Q1 versus a per-share loss of 15 cents in the year-ago period. Revenue is projected to jump 47.3% to $8.1 billion.

Affirm Selloff Creates Opportunity, Says Analyst

Affirm Holdings has not been immune to broad-market troubles in 2022, with shares down more than 75% for the year-to-date.

The reaction to the buy now, pay later (BNPL) stock's mid-February earnings report – where AFRM shares slid nearly 21% the day after the results were released – only exacerbated these headwinds.

"AFRM has been pressured since reporting fiscal second-quarter results," says Truist Securities analyst Andrew Jeffrey. This, according to Jeffrey, is due to a general multiple contraction, liquidity concerns and the perception of rising competition.

However, the analyst, who has a Buy rating on AFRM stock, isn't worried. While the recent selloff creates an opportunity, "rising BNPL demand, driven by changing consumer demographics and tastes, creates opportunity for several providers." And secular demand for BNPL "will outpace any cyclical headwinds."

So what's in store for Affirm's fiscal third-quarter earnings report, due out after Thursday's close?

Consensus estimates are for the company to record a per-share loss of 53 cents for the three-month period, an improvement over the $1.06 per-share loss it reported in the year-ago period. Revenue, meanwhile, is expected to climb 73.6% YoY to $344.0 million.

The earnings calendar was front and center Wednesday as a mixed session for the broader indexes was easily overshadowed by a plunge in of Wall Street's most notable mega-caps.

Netflix (NFLX) suffered its worst single-day decline in 18 years – a 35.1% nosedive eroding roughly $55 billion in market value – triggered by the company's first quarterly subscriber loss since 2011.

The streaming giant, which expected to add 2.5 million net subscribers during the first quarter, announced it had lost 200,000, triggering a flurry of analyst downgrades despite an easy earnings beat. The shortfall was in part caused by Netflix's decision to pull out of Russia, which cost it 700,000 subscribers, but inflation is also forcing customers worldwide to make tougher spending choices.

CEO Reed Hastings also said NFLX was planning to launch an advertising-supported version.

"The initial allure of Netflix was that it didn't have any ads; it's unclear if Netflix fans will be amenable to advertisements," says David Trainer, CEO of investment research firm New Constructs. "Rivals like Disney can monetize content through a variety of other channels, like merchandise and theme park revenue. Netflix doesn't have the infrastructure for those kinds of revenue streams."

Ripples were felt throughout the streaming industry. Rivals including Disney (DIS, -5.6%), Amazon.com (AMZN, -2.6%), Warner Bros. Discovery (WBD, -6.0%), Paramount Global (PARA, -8.6%), Roku (ROKU, -6.2%) and even Chinese streamer iQiyi (IQ, -6.7%) all finished well in the red.

These losses weighed heaviest on the Nasdaq Composite, which declined 1.2% to 13,453. Faring relatively better were the S&P 500 (down marginally to 4,459) and Dow Jones Industrial Average (+0.7% to 35,160), which were buoyed by more positive earnings news.

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International Business Machines (IBM, +7.1%) was the Dow's top component after it reported a 24% pop in profits and beat top- and bottom-line expectations.

"Stringing together consecutive quarters of outperformance illustrates that there is a clearer path to accelerating growth in 2022," says Morgan Stanley analyst Erik Woodring (Overweight, equivalent of Buy).

Meanwhile, price hikes helped Procter & Gamble (PG, +2.7%) offset inflation-pressured margins and deliver better-than-expected sales and profits.

Tesla (TSLA), off 5.0% during Wednesday's session, was up by roughly the same percentage following a Street-beating Q1 report. Earnings of $3.22 per share easily cleared estimates of $2.26, while revenues of $18.76 billion topped the consensus mark of $17.80 billion.

Other news in the stock market today:

• The small-cap Russell 2000 managed a 0.4% improvement to 2,038.
• U.S. crude futures edged up 0.1% to settle at $102.19 per barrel.
• Gold futures slipped 0.2% to finish at $1,955.40 an ounce.
• Bitcoin was relatively calm, sliding 0.3% to $41,243.10. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.
• Rite Aid (RAD) stock was up more than 38% at its intraday peak before paring its gain to 10.8%. Sparking the surge was a report in the New York Post that suggested the pharmacy chain rejected a late-March buyout bid from Spear Point Capital Management. According to the article, the private-equity firm offered to buy Rite Aid for $815 million, or $14.60 per RAD share – a 56% premium to its March 30 close at $9.36.
• Omnicom Group (OMC) jumped 4.5% after the advertising firm reported earnings. Despite suspending operations in Russia during the first quarter, OMC reported earnings $1.39 per share and revenue of $3.41 billion – more than the $1.30 per share and $3.29 billion analysts were expecting. CFRA Research analyst Janice Quek maintained a Buy rating on OMC stock, citing the company's "good cost control" and an upward revision to its organic growth forecast.

The Time to Buy Emerging Markets?

Inflation is hardly just an American problem.

Yesterday, the International Monetary Fund said inflation was a "clear and present danger" as it lowered its 2022 global GDP forecast by 0.8 percentage points, to 3.6%. And emerging markets are expected to struggle even more than developed economies as higher prices weigh heavy on commodity importers.

That in turn has meant even worse year-to-date returns for many emerging market (EM) stocks compared to their still struggling U.S. counterparts.

But this dip might prove an ideal buying opportunity for those wishing to brave the high potential (and high volatility) of EMs, especially given expectations for emerging market growth to recover in 2023.

If you want to take the plunge, you can spread out your risk across dozens or even hundreds of stocks from numerous countries through exchange-traded funds (ETFs). Or you can narrow your bet to a single region – for instance, these five stocks and funds allow you to harness the growth of Africa.

If you're looking for some of the most potent individual picks across the globe, however, look no farther than this cluster of 11 emerging-market stocks. We explore the opportunity each presents, and what about them stands out to stock-research experts.

First-quarter earnings season starts to heat up this week. Among the notable names on the earnings calendar are electric carmaker Tesla (TSLA, $986.01), pharmaceutical giant Johnson & Johnson (JNJ, $180.05) and streaming name Netflix (NFLX, $343.38).

Results from JPMorgan Chase (JPM) last week underscored how macro factors are impacting publicly traded corporations. "The firm cited higher probabilities of downside risks driven by the war between Russia and Ukraine as well as elevated inflation," says Dan Eye, chief investment officer at asset manager Fort Pitt Capital Group.

"It feels like there is more uncertainty heading into this quarter's earnings season than there has been in some time," says Michael Reinking, senior market strategist at the New York Stock Exchange.

While Reinking expects first-quarter earnings to remain strong, guidance will likely fall on the conservative side.

"Investors will be looking to conference calls for a better understanding of how the environment is shaping up," Reinking adds. "The margin story will remain a focal point with the main questions centered around whether price increases have been tolerated, are they impacting demand and has that changed in the back half of the quarter as the consumer is now getting hit on multiple fronts."

Tesla Earnings to Show Strong YoY Growth

Oppenheimer analyst Colin Rusch (Outperform) thinks Tesla's ability to pass on higher supply-chain costs to consumers will help drive margins for the automaker. The company has "substantial pricing power," Rusch says, "as demonstrated on recent price increases across models and commentary that the company is sold out through the end of the year in certain geographies."

It's already been a busy news cycle for Tesla. In addition to headlines signaling a potential second TSLA stock split in just two years, CEO Elon Musk followed up reports that he took a sizable stake in Twitter (TWTR) with an offer to buy out the microblogging site.

But this week, attention will be back on Tesla's fundamentals, with the company scheduled to report its first-quarter results after Wednesday's close.

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Earlier this month, the company said it delivered more than 310,000 in the first three months of the year. "TSLA's growth stands in stark contrast to other automakers who posted steep declines in U.S. sales in Q1," says CFRA Research analyst Garrett Nelson. He adds that the startup of the company's new factories in German and Texas will accelerate deliveries going forward.

The analyst also believes that "supply agreements signed with mining companies position the company to navigate battery raw materials shortages more successfully than competitors." Nelson has a Buy rating on TSLA stock, saying the company's "first-mover and cost of capital advantages, as well as future demand from the rental car and commercial truck markets, remain underappreciated by investors."

For TSLA's first quarter, analysts, on average, are targeting earnings of $2.26 per share – a marked improvement over the 93 cents per share it reported in Q1 2021. On the top line, the consensus estimate is for $17.8 billion, up 71.2% year-over-year (YoY).

Johnson & Johnson Earnings Could Get Hit By Forex Headwinds

Inflation will certainly be in focus when Johnson & Johnson reports its first-quarter earnings report ahead of Tuesday's open.

In JNJ's fourth-quarter earnings call, Chief Financial Officer Joe Wolk acknowledged that the company was "experiencing the impact of inflationary pressures, including higher input costs across our business and more significantly with respect to consumer health." According to Wolk, this included the "availability and cost of certain commodities, labor and transportation."

To counter these cost pressures, the executive said JNJ was initiating price increases across its consumer health portfolio in 2022.

Meanwhile, "The 'macro' has engulfed the med tech narrative and added to the near-term uncertainty," writes Raymond James analyst Jayson Bedford. However, he still sees plenty of demand for the industry.

Bedford has an Outperform (Buy) rating on the Dow Jones stock. He believes the company's "growth profile" is supported by gains in both its pharmaceutical and medical technology segments, as well as the spinoff of its consumer health business.

But he recently lowered his first-quarter revenue and adjusted earnings per share (EPS) estimates (to $23.7 billion and $2.50 per share, respectively) due to forex-related headwinds. Consensus estimates are for Johnson & Johnson to report revenue of $23.7 billion (+7.7% YoY) and earnings of $2.61 per share (+0.8% YoY).

Netflix Price Hikes Could Offset Slowing Subscriber Growth

It's been a rough year for communication services stocks and Netflix is no exception. Shares are off around 43% so far in 2022 to erase all of their pandemic-related gains.

In addition to broad-market headwinds, Netflix has been hampered by slowing subscriber growth. In late January, NFLX stock plunged almost 22% the day after reporting lower year-over-year subscriber additions in the fourth quarter and guiding for even slower growth in the first quarter.

And this metric was likely pressured even more so after Netflix joined the growing list of companies pulling out of Russia by suspending service in the country.

Still, Netflix's "first-mover advantage and large subscriber base provides the company with a nearly insurmountable competitive advantage over its streaming peers," says Wedbush analyst Michael Pachter (Neutral). He adds that the firm's mid-January price hikes on U.S. plans will offset slowing user growth.

NFLX will unveil its first-quarter earnings report after April 19 close. Analysts, on average, are looking for earnings of $2.90 per share (-22.3% YoY) and revenue of $7.9 billion (+10.7% YoY).

Tech stocks have traversed a rocky road since we turned the calendar over to 2022.

General fears that the pandemic recovery was fully priced in heading into the new year, coupled with concerns about inflation and higher interest rates, caused many of the biggest and most widely held names out there to take a spill.

And the equities market has become even more volatile lately amid Russia's invasion of Ukraine – creating even bigger headwinds for already struggling tech stocks.

Sure, there are times when a stock takes a beating for good reason. One-time growth darling Netflix (NFLX), for instance, waved red flags in its January earnings report about future subscriber growth, sending shares tumbling to a nearly 22% single-session loss as a result.

However, some of the best tech stocks have been beaten down without the same kind of headlines to blame. And in some cases, popular tech stocks have seen declines despite earnings reports that show a decidedly positive outlook.

If you're interested in looking beyond the day-to-day volatility, here are 10 beaten-down tech stocks trading at stiff discounts relative to where they started the year. The names featured here will likely be familiar to most investors and all have solid growth prospects over the long term.

Data is as of March 7.

• Market value: $1.7 trillion
• Year-to-date decline: -12.8%

Google parent Alphabet (GOOGL, $2,527.57) announced earlier this year it would execute a 20-for-1 stock split in July, taking its share price down significantly to allow for greater liquidity in trading. But investors might not want to wait until that restructuring, because in many ways, GOOGL stock could already be "cheap" – despite its price tag of roughly $2,500 a share at present.

That's in part because Alphabet is humming along quite nicely, with projections of an 18% increase in its top line this fiscal year and another 15% rise in fiscal 2023. Part of this improvement is because Google's ad network remains the go-to platform for digital marketing, and we continue to see brisk growth in this category. Consultancy firm Zenith Media has estimated that of all global ad spend, 60% of marketing budgets are dedicated to digital channels.

But it's also because Alphabet's only serious rival to reach digital channels is social media giant Meta Platforms. And FB has been hard hit by a series of missteps that have weighed on both user engagement as well as advertisers' willingness to put their cash on channels such as Facebook and Instagram.

There is certainly a "risk-off" environment in early 2022, but there's not a lot of risk in the assertion that Alphabet will remain the dominant venue for digital ad spend going forward. That may make this a solid choice for patient investors seeking out discounted tech stocks.

• Market value: $1.4 trillion
• Year-to-date decline: -17.8%

Aside from the fact that it's down roughly the same amount as the broader stock market since Jan. 1, what's not to like about tech giant Amazon.com (AMZN, $2,749.06)?

It's the go-to name in e-commerce, with an estimated 40% of all dollars spent online, according to a 2021 analysis conducted by research firm eMarketer. What's more, AMZN continues to grow as consumers increasingly spend their cash digitally thanks to long-term uptrends in this category.

Digital transformation research company Insider Intelligence estimates that even after the exponential growth in e-commerce seen during the pandemic – a trend that is now baked in to consumer behavior – we'll still see online retail sales jump an additional 16% in the U.S. in 2022.

If that wasn't enough, Amazon Web Services (AWS) is an equally compelling reason to love AMZN stock. This platform is the leader in the space, with roughly a third of global cloud infrastructure spend going to Amazon, according to software-as-a-service (SaaS) firm ParkMyCloud.

And it's telling that CEO Andy Jassy, who was brought up in the organization running AWS, took over the reins from founder Jeff Bezos last July. That shows investors the company is looking to this high-growth, high-margin division to carry it forward.

Inflationary pressures are not always good for spending trends in the short term, but Amazon has what it takes to thrive for many years to come, so it might be premature to write off this discounted tech stock just because of volatility caused by a broad "risk-off" environment in 2022.

• Market value: $2.6 trillion
• Year-to-date decline: -10.3%

The fact that many major stock market indexes weight their components by size has undeniably worked against Apple (AAPL, $159.30) lately. As the largest U.S. corporation – with a current market capitalization of roughly $2.6 trillion – it is in many ways the stock most affected by broad-market sentiment instead of its own fundamentals.

Consider that Apple represents about 7% of the popular S&P 500 Index and 12% of the Nasdaq-100. And technology sector funds like the popular Vanguard Information Technology ETF (VGT) are even more Apple-heavy. For instance, while this fund is ostensibly spread across 360 tech stocks, AAPL represents a staggering 23% of the entire fund at present!

Simply put, when investors sell off their ETFs, they are likely punishing Apple more than any other stock on the market simply because of its dominance in market-cap-weighted funds.

However, the fundamentals of Apple are simply too attractive to pass up despite these structural pressures. The iPhone maker nets over $100 billion in annual cash flow and according to its 10-K in September boasted $172 billion in cash equivalents and marketable securities. And despite its already impressive scale, analysts expect 8% revenue growth and a roughly 10% increase in earnings per share this fiscal year.

What's more, AAPL stock has been one of the biggest wealth creators over the past 30 years.

There is no way Apple is going away anytime soon, and it continues to show strength. And more importantly, the index weightings that have held it back because of broad selling in early 2022 can and will reverse – and might deliver outsized gains for investors who choose to pick up this tech stock at a discount to where it was trading not long ago.

• Market value: $56.6 billion
• Year-to-date decline: -39.6%

Technically, the company is Block (SQ, $97.51), but the ticker comes from its dominant mobile payments platform Square – which, by the way, continues to drive performance. In fact, some stubborn investors refuse to call it Block just as they won't call Alphabet (GOOGL) anything but Google, or Meta Platform (FB) anything other than Facebook.

Investors haven't been fooled by the rebranding as Block back in December 2021, but they have been fooled in another more material sense lately. That's evident by the fact that shares have cratered since Jan. 1 for seemingly no particular reason other than the rebranding itself. Unfortunately, the effort was a rather ill-timed exercise by management to align themselves with the emerging technology of blockchain. As a result, SQ stock has been punished in 2022 as volatility in cryptocurrencies has been the norm.

But let's be clear: While there may be limited crypto on the balance sheet of this company, this is fundamentally a mobile payments play. Consider that when Block reported earnings in February, it gapped up more than 26% in a single session thanks to spectacular results. These included gross profit of $1.18 billion in its fourth quarter, up 47% over the prior year, driven by 37% growth in its Cash App arm and an impressive 54% increase in its previously prominent Square ecosystem.

With continued growth projected in both earnings and sales going forward, the poorly timed choice to focus attention on blockchain shouldn't detract from the long-term value proposition of this mobile payments firm. And SQ's recent pullback allows investors the opportunity to pick up a solid play among beaten-down tech stocks.

• Market value: $230.9 billion
• Year-to-date decline: -12.3%

Admittedly, Cisco Systems (CSCO, $55.59) isn't quite as dynamic as some of the other tech stocks on this list. The infrastructure platforms company has seen plenty of ups and downs over the years on concerns about "disruption" by evolving technology and hungry competitors, and, in many ways, that remains the same as it ever was.

However, Cisco used the already disruptive events of the pandemic to embark on another round of restructuring that included $1 billion in planned cost reductions. These included an accelerated exit from unprofitable IT markets and a revamp of the financial team that included the departure of its chief financial officer.

That decision was pretty well-timed, and CSCO notched its fourth straight quarter of year-over-year revenue growth in its most recently reported quarter, with sales up 6% over the year prior. It also beat Wall Street expectations on profits to boot.

What's more, Cisco just authorized another $15 billion stock buyback plan. The company also raised its quarterly dividend 2.7% to 38 cents per share, marking its 12th dividend hike since instituting payouts back in 2011.

Sure, the Dow Jones stock might not set the world on fire like a disruptive start-up. But it has solid operations and a generous 2.7% yield at current pricing to provide peace of mind.

Shares had climbed to new multi-year highs in December in part because the stock seemed to be on the right track. And the pullback we've seen in the last few months could be an opportunity for patient investors to jump in and enjoy continued dividend growth in the coming years.

• Market value: $12.0 billion
• Year-to-date decline: -19.3%

Ride-sharing service Lyft (LYFT, $34.48) was one of the hottest names out there at the time of its 2019 IPO. And after some initial struggles and the disruptions of the pandemic, it seemed like things were getting back on track in 2021. But as Wall Street started to get risk-averse in the new year, LYFT stock's struggles resumed.

Still, Lyft is clearly in recovery mode and getting back to the previously planned successes that made investors enthusiastic about the company before the pandemic. Namely, fiscal 2022 revenue is predicted to hit nearly $4.3 billion, up 32% from fiscal 2021 and easily eclipsing the $3.6 billion in revenue from back in fiscal 2019 – before social distancing put a damper on ride sharing and travel trends.

Additionally, unlike rival Uber Technologies (UBER), Lyft is projected to be comfortably profitable this year – and if projections hold, should see 62 cents per share in earnings in fiscal 2022, which is projected to more than double to $1.45 per share in fiscal 2023.

There's a reason the long-term growth narrative in ride-sharing stocks was all the rage a few years ago: Demographic trends show more people are living in urban areas and fewer people are eager to own their own cars. Between a resurgence in travel as the worst of COVID-19 is behind us and this multiyear megatrend toward ride sharing, it might be worth looking beyond the recent declines and enjoying a leisurely ride on Lyft for the long term.

• Market value: $2.1 trillion
• Year-to-date decline: -17.1%

Second only to Apple, Microsoft (MSFT, $278.91) clocks in at $2.1 trillion in market value. And similar to its fellow Dow stock, MSFT faces structural challenges thanks to being overweight in index funds. The stock accounts for roughly 6% of the S&P 500, compared with 7% for Apple.

It's also important to recognize Microsoft also shares many of the same dominant balance-sheet characteristics that AAPL does. Last year, the software provider reported cash and investments worth $130 billion, on top of net operating cash flow of $77 billion.

But Microsoft somehow has been punished even more than Apple despite its staying power. Part of that might be because MSFT at the end of last year dipped into its war chest to buy embattled video game studio Activision Blizzard (ATVI) for $69 billion. The deal not only reduces its cash cushion, but has also been the target of shareholder lawsuits and Federal Trade Commission (FTC) review.

However, it's not like the core business of Microsoft has been struggling. In January, it posted great earnings that featured year-over-year revenue growth of 20% and a 22% increase in earnings per share. What's more, it is increasingly important that Microsoft's cloud segment surpassed $22 billion to see an even faster growth rate of 32%.

Microsoft remains the dominant name in enterprise technology, and no geopolitical tensions or inflationary pressures will change that. As such, the recent decline in share price allows investors the opportunity to scoop up one of Wall Street's favorite stocks at a much lower price than where it was to start the year.

• Market value: $532.1 billion
• Year-to-date decline: -27.4%

For much of the past few years, it seemed like Nvidia (NVDA, $213.52) could do no wrong. The high-growth chipmaker had been trading at less than $40 per share as recently as late 2019 before surging to an all-time high of about $350 at the end of 2021 – prompting some billionaire investors to take profits off the table in Q4.

Of course, the story has been much different lately as shares have rolled back in a big way thanks to the general volatility on Wall Street that has hit many tech stocks. Exacerbating headwinds are NVDA's perceived exposure to negative cryptocurrency trends thanks to its mining-related hardware.

Strangely enough, however, the narrative that drove Nvidia to prior highs has persisted even if Wall Street seems to be distracted by other things. Current fiscal-year projections are for 29% revenue growth, followed by 17% growth next year. Similarly, earnings per share are set to expand at 26% and 20% each year, respectively.

Yes, there's a bit of crypto exposure here thanks to its mining hardware. But NVDA is not a direct play on bitcoin or ether or anything else, as it has other very lucrative chips in its arsenal too. Consider that in Nvidia's most recent quarter, video game graphics card sales jumped 37% and data center revenue exploded 71% over the year-ago figures.

If the investing thesis before was that NVDA is a dominant semiconductor stock that has in-demand branded designs offering continued growth and high margins, then that hasn't changed at all. So perhaps it's worth taking a look at this beaten-down tech stock after its recent stumbles.

• Market value: $70.9 billion
• Year-to-date decline: -59.3%

If investors are asked to think of a publicly traded company down more than 50% this year, they would likely name a state-owned Russian oil company. But oddly enough, e-commerce platform Shopify (SHOP, $560.80) is among the worst performers since Jan. 1, with a staggering 59% decline over less than three months' time.

And it's hard to see why such a gut-wrenching drop is warranted. Yes, perhaps the valuation of this high-flying tech stock was a little out of whack. Investors piled in during the pandemic and bid up shares from about $300 at the firm's March 2020 lows to a short-lived high north of $1,700 late last year.

But now SHOP stock is back in the mid-$500s, despite predictions of 30% revenue growth to $7.7 billion this fiscal year. And while profitability has taken a hit compared with the juicy pandemic margins, it's not like this is a company bleeding cash as it grows at such a rapid rate. Earnings are still expected to arrive at $4.60 per share in fiscal 2022 and rise to $6.42 per share in fiscal 2023.

It's clear that consumers are only going to be spending more cash on e-commerce and digital platforms in the future too. And while small or local businesses may never unseat online retail behemoth Amazon.com (AMZN), it's dangerously naïve to think they can operate without a digital storefront at all. That means built-in demand for Shopify's services for many years to come; particularly as its software-as-a-service (SaaS) model isn't just a one-time fee, but a subscription for ongoing maintenance.

As with many of the other cheap tech stocks on this list, SHOP's volatility is certainly extreme right now in the wake of its late-2021 high. But seeing as the stock is back to levels not seen since the beginning of the pandemic, it could be worth considering whether the long-term promise of Shopify is the same as it was back in 2019 and early 2020 before COVID-19 or Russia's invasion of Ukraine or inflation fears.

If your answer is "yes," and you are able to stomach the day-to-day gyrations, this beaten-down tech stock could be an aggressive buy.

• Market value: $831.5 billion
• Year-to-date decline: -23.9%

Tesla (TSLA, $804.58) has crossed many milestones since selling its first Roadster electric vehicle back in 2009. Any while naysayers sometimes like to pooh-pooh this dynamic manufacturer as a niche play, 2021 brought a very important development as TSLA actually sold more units in the U.S. than popular luxury car nameplate BMW, according to research firm Cox Automotive.

This is proof that Tesla continues to offer unrivaled growth as it eats into the market share of old school automakers. And looking forward, it seems very unlikely anything will stop TSLA stock. The company has forecast vehicle delivery growth of more than 50% in 2022 on top of its already impressive expansion so far and despite lingering supply-chain issues.

The stock has grown rapidly since its 2010 initial public offering (IPO) to become one of the top seven U.S. stocks as measured by market capitalization for a reason. And structurally, it benefits from the fact that its CEO Elon Musk is sitting on roughly 170 million shares – about 17% of the 1.0 billion shares publicly available for trading – that he has no intention of selling.

You can sometimes make money betting against Tesla based on short-term sentiment. But long term, this is a name to be reckoned with and could be a buy among beaten-down tech stocks.

Amazon.com is raising the annual Amazon Prime cost for membership on its estimated 126 million U.S. Amazon Prime subscribers.

The price will rise to $139 in 2022, a $20 hike from the current $119 annual membership, in place since 2018. For those who pay by the month, fees climb from $12.99 to $14.99.

The online retail powerhouse announced the 17% increase alongside its fourth-quarter financial results. Amazon outlined its case for the $20 bump – the typical hike when it boosts Amazon Prime subscription fees:

"In the last few years, we’ve added more product selection available with fast, free, unlimited Prime shipping; more exclusive deals and discounts; and more high-quality digital entertainment, including TV, movies, music, and books," Amazon Prime vice president Jamil Ghani said in the Q4 press release.

The Amazon Prime subscription price increase goes into effect Feb. 18 for new members and March 25 for current members.

We wrote back in January that Amazon, which tends to hike subscription costs in four-year cycles, was largely expected to raise membership fees this year.

Of course, the retail picture in 2022 versus 2018 is a lot different – and a lot darker. Amazon and other retailers are facing plenty of challenges: supply-chain issues, worker shortages and wage increases for employees.

Also, when Amazon last raised its Prime membership cost, Walmart’s alternative, Walmart+, wasn’t around. It is now, offering free next-day or two-day delivery, prescriptions and gasoline discounts among its perks, all for $84 a year. Plus, given the general tension about inflation, Amazon risks a wave of consumer anger over this latest Prime price increase.

Amazon isn't the only popular subscription service that has upped its prices in recent years. Netflix has increased fees charged to its users three times since 2018, including a $1 to $2 hike this year, and Hulu has raised fees for its services multiple times in the past three years.

Stocks ended the holiday-shortened week (markets were closed Monday for Martin Luther King Jr. Day) how they started it – deep in the red.

And, as with Tuesday's trading, the bearish catalyst today was corporate earnings; specifically, dismal results from streaming giant Netflix (NFLX, -21.8%), which reported lower-than-expected subscriber numbers for its fourth quarter and forecast slowing subscriber growth in Q1.

"Investors are finally recognizing a huge risk that has been lurking around Netflix for years and that is increased competition in the streaming space," says David Trainer, CEO of Nashville-based investment research firm New Constructs. "Netflix has lost its first mover advantage in the streaming space and Disney (DIS) is its biggest threat."

Another possible culprit behind today's huge volatility is options expiration. "The options market has become critically important to stock investors, even if they don't trade options," says Michael Oyster, chief investment officer for asset-management firm Options Solutions.

"Friday's options expiration was the second-largest on record as $1.3 trillion of equity options expired. This impacted how stocks behaved and drove many prices higher or lower based on options action."

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Despite a brief midday pop into positive territory, the Nasdaq Composite ended the day down 2.7% at 13,768 – marking its first close below 14,000 since June 9 – the S&P 500 Index was off 1.9% at 4,397 and the Dow Jones Industrial Average was 1.3% lower at 34,265.

What's more, the Nasdaq suffered its worst weekly loss since March 2020 (-7.6%), while the S&P 500 and Dow also ended sharply lower on a weekly basis (-5.7%, -4.6%, respectively).

Other news in the stock market today:

• The small-cap Russell 2000 fell 1.6% to land at 1,987.
• U.S. crude oil futures followed equity markets lower, though they still finished with just a modest 0.5% decline to $85.14 per barrel. Oil futures also secured a fifth consecutive weekly gain.
• Gold futures similarly notched a weekly finish in the green despite slipping 0.6% to $1,831 per share.
• Bitcoin continued its 2022 slide, suffering a severe 10.3% plunge to $38,328.63, its lowest level since August 2021. "It is already difficult to interpret the trend of traditional currencies, let alone that of cryptocurrencies that, historically, have always been characterized by very strong volatility. Sometimes a tweet is enough to hit a record," says Eloisa Marchesoni, an angel investor and cryptocurrency consultant. She cites the Federal Reserve's interest-rate signaling, as well as the worsening situation in Kazakhstan (the second-largest Bitcoin miner behind the U.S.), among Bitcoin's woes, but adds that "these are exogenous events that have nothing to do with the structural resilience of the crypto market, so we should be patient and wait for the consequences of such events to unroll." (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• A host of mega-cap stocks took outsized responsibility for Friday's broad-market declines. Among companies worth $200 billion or more by market cap that lost at least 3% today? Wells Fargo (WFC, -2.4%), Meta Platforms (FB, -4.2%), Tesla (TSLA, -5.3%), PayPal Holdings (PYPL, -5.6%), Amazon.com (AMZN, -6.0%) and Walt Disney (DIS, -6.9%).
• If there's any glimmer of hope for the rest of the stock market (eventually), it might be Friday's violent rebound in Peloton Interactive (PTON, +11.7%). The stock finally bounced after a painful 2022 that saw the workout-equipment company lose as much as a third of its value through Thursday, driven partly by yesterday's news that it would stop producing exercise bikes and treadmills amid slowing demand. Of course, whether Friday's performance is merely a dead-cat bounce remains to be seen, and PTON shares are still off by a painful TK% year-to-date through today's close.

Tech Earnings, Fed Ahead

Next week could bring a fresh bout of volatility to the markets. In addition to Apple (AAPL) and Microsoft (MSFT) headlining a tech-heavy earnings calendar, there's also the two-day Federal Open Market Committee (FOMC) policy-setting meeting, set to kick off on Tuesday, Jan. 25.

While the Fed isn't expected to raise rates until at least the March meeting, anxiety about the start of the central bank's rate hikes has served as a spark for the recent market selloff, so that even just a gathering of central bankers could spook markets.

But while stock volatility may be exacerbated in the short term, the current rate cycle is needed in order for "a return to normal," says Brad McMillan, chief investment officer for registered investment advisor Commonwealth Financial Network. Yes, higher rates will likely mean slower growth and lower stock valuations, but "the economy and markets can and do adjust to changes in interest rates." he adds.

One way for investors to "keep calm and carry on," as McMillan advises they do, is to focus on the long term and make sure their portfolio is full of stable, dividend-paying stocks.

There are plenty of income-producing ideas across the market, with real estate investment trusts (REITs), utilities and consumer staples among the most generous payers – many of which show up on our list of the 22 best retirement stocks for 2022. The names featured here offer secure dividends based on solid fundamentals and have strong potential to keep increasing their payouts over the long term.

The fourth-quarter earnings season kicked off last week with mixed results from several big banks. Financial firms will be in focus again this week, with blue chip Goldman Sachs (GS, $383.64) one of the highest-profile banks to report. Insurance giant UnitedHealth Group (UNH, $468.37) and streaming pioneer Netflix (NFLX, $517.61) round out a busy earnings calendar.

Earnings season is always an important time, says Brad McMillan, chief investment officer for registered investment advisor Commonwealth Financial Network. But this one, in particular, will be especially important.

Why?

For one, he says, Q4 results will likely show how much damage was done to the economy in the short term by the delta and omicron variants of COVID-19. "In the longer term, this quarter's results will give us some guidance as to whether the very strong earnings growth we saw last year will continue for another couple of quarters – or peter out," McMillan adds.

"The resilience of corporate earnings has far exceeded even the most bullish of forecasts coming out of this crisis," says Michael Reinking, senior market strategist for the New York Stock Exchange. In recent quarters, companies' use of pricing power and strong demand by consumers helped firms beat estimates, and Reinking sees a similar setup heading into the Q4 earnings season.

"The operating environment remained challenging again though there were some signs that supply chain issues were dissipating before omicron hit," he writes. And while omicron could throw a wrench in any progress that was made in Q4, it seems as though "the demand side of the equation has remained strong."

And while just a slim percentage of S&P 500 companies have unveiled their results, the news, so far, is good, McMillan adds. "More than three-quarters have reported earnings higher than expected, and nine of 10 had better revenue than expected."

Are Slowing Growth Expectations Priced Into Netflix Stock?

Netflix stock entered the fourth quarter of 2021 with the wind at its back. The shares were trading north of $600 per share in early October, well above their summer lows near $490. The momentum continued into November, with the shares briefly topping the $700 mark for the first time ever, before it all came crashing down. At last check, NFLX stock is hovering around $518 – down 26% from that mid-November peak.

UBS analyst John Hodulik thinks momentum stalled in Q4 subscriber growth, as well. Specifically, he says NFLX came into October following the September launch of the highly popular Squid Games series and the seasonal pickup in December lagged previous years. "This is despite the robust content slate, suggesting the industry is still digesting outsized growth from the pandemic," he adds.

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Hodulik is targeting 7 million new net adds in Q4, which marks a 14.3% year-over-year (YoY) decline. Nevertheless, given Netflix stock's recent selloff, the analyst believes expectations for slowing net subscriber growth are likely already priced in. He has a Buy rating on NFLX, calling the company a "secular winner with scale, penetration upside and pricing power."

As for Netflix's full fourth-quarter results, which are due after the Jan. 20 close, analysts, on average, are expecting earnings per share (EPS) of 82 cents – down 31% from the year prior. Revenue, on the other hand, is forecast to arrive at $7.71 billion, +16.1% YoY.

Analyst: Goldman Sachs Remains "Best in Class"

Goldman Sachs will follow in the wake of several of its peers when it steps into the earnings confessional ahead of Tuesday's open.

For GS' fourth quarter, the consensus estimate among Wall Street pros is for earnings of $11.73 per share (-2.9% YoY). The big bank is expected to post revenue of $12.01 billion, which is a modest 2.3% improvement from the year-ago figure.

In what was a record-setting 2021, "a spike in difficult-to-navigate late-quarter market volatility weighed on fixed-income trading and underwriting enough to mute the magnitude of our 4Q EPS estimate increases," says Jefferies analyst Jeffery Harte (Overweight, the equivalent of Buy).

Still, Harte is targeting earnings of $11.94 per share for Goldman, which is above the consensus. He sees GS as one of the big banks that has the scale to support returns and boost market share; whose business is fundamentally leveraged to economic recoveries; and whose valuation is attractive.

CFRA Research analyst Kenneth Leon (Strong Buy) agrees. "GS is executing on all cylinders with industry-leading performance, gaining market share, and growing assets under supervision, at $2.37 trillion, which drives fee income," he says.

"We think GS can extend quality growth in asset and wealth management and consumer banking, while investment banking has a strong pipeline," Leon writes, adding that Goldman is the best way to play these trends.

And the "best-in-class" stock is cheap, Leon adds. GS is currently trading at 9.8 times forward earnings, well below the S&P 500 at 21.1x and other lead asset managers like Charles Schwab (SCHW) at 24x.

Wall Street Expects Strong Q4 Results for UnitedHealth Group

UnitedHealth Group stock has pulled back alongside the broader equities market to start 2022, down 7% for the year-to-date.

Can the company's fourth-quarter earnings report – slated for release ahead of the Jan. 19 open – provide the jolt the stock needs to resume its longer-term uptrend?

Analysts are certainly bullish on the Dow Jones stock ahead of earnings. Of the 26 following UNH tracked by S&P Global Market Intelligence, 16 say it's a Strong Buy, six call it a Buy, three believe it's a Hold and one deems it a Sell.

Truist Securities analyst David MacDonald is one of those with a Buy rating on UNH. "We are bullish on UnitedHealth Group tied to the company's scale, diversification, attractive growth opportunities across multiple business segments and differentiated business model," he writes.

The analyst calls Optum – the company's pharmacy benefits manager – a "key differentiator." Among other bullish drivers, MacDonald points to UNH's "sizable" balance sheet and its ability to drive significant free cash flow, which is the money left over after a company has paid its expenses, interest on debt, taxes and long-term investments needed to grow its business.

When it comes to expectations for UNH's fourth-quarter results, Wall Street's pros are upbeat. On average, they see earnings of $4.31 per share (+71% YoY) and revenue of $72.67 billion (+11% YoY).

Sure, you’ve heard the warnings about shopping early because of supply chain issues this year, but chances are there are still some folks on your gift list who you haven’t yet figured out what to get. Have no fear. Even in the 11th hour of the holiday season, you can pull a great idea out of your Santa hat. Plus, you can give the gift of purchasing power in a way that’s more fun, thoughtful (and prudent) than a stocking full of cash.

Most of the items on our annual list of personal gifts will save the recipients money in the long run—either by eliminating some of their recurring expenses or boosting their earning power. Your friends and family will be sure to remember your generosity all year long as the savings keep rolling in.

But even at Kiplinger, we know that saving money isn’t the only thing in life. COVID-19 has inspired us to include some ideas that are just plain fun and activities that can be done at home.

Stocks as stocking stuffers couldn’t be easier with gift cards from Stockpile, a self-directed online brokerage. You pick a company like Google (GOOGL) or Netflix (NFLX) to purchase a gift card that can be redeemed for its stock. You can choose from hundreds of stocks, or give a multi-company card that comes with a list of picks available to the recipient and let your recipient build a portfolio. Cards for exchange-traded funds are another option. Or you can just gift an amount of money and let the recipient do the picking.

To redeem the card, the gift card recipient must open a free Stockpile brokerage account online. She can choose to invest in the company you picked or select another. If she redeems the gift for stock by 3:00 p.m. (Eastern) on a regular trading day, she gets the shares at that day’s closing price. After that time or on a day the market is closed, the trade will be executed at the closing price on the next day the market is open. Depending on the value of the card and the stock, she may wind up with fractional shares.

But you don’t have to use Stockpile to give stocks or funds. If your recipient already has their own brokerage account, you can buy for them directly—or directly gift them your own shares—if you have the account information.

Cost

At Stockpile, gift cards can be found in denominations of $1 to $1,000 and can be sent via email or text on a specified delivery date at a designated time. They can also be printed out with a redeemable QR code.

How would the recipient of your present like to learn about science from Bill Nye, the Science Guy, or about cooking from tv chef Gordon Ramsay? How about chess lessons from Gary Kasparov or writing guidance from Margaret Atwood? Alicia Keys teaches songwriting and Herbie Hancock teaches jazz. My goodness, Itzhak Perlman gives violin lessons. And Hillary Rodham Clinton teaches a class called "The Power of Resilience."

Perhaps more on-brand for our readers, they can learn business leadership lessons from Disney’s Bob Iger or former Starbucks CEO Howard Schultz or economics from Nobel Prize winner Paul Krugman. All this and much more is available through Master Class, an online platform that sells video lessons from some of the most well-known subject experts in the country.

Cost

The cost starts at $15 a month, billed annually.

You can freshen up a loved one’s living space while trimming their grocery costs by giving her a kitchen herb garden. Your gift recipient doesn’t need a particularly green thumb in order to grow herbs. But you may want to consider the amount of sun exposure the garden’s new home might get in order to pick the right herbs. For example, basil, rosemary and sage need six hours or more of full sun each day to thrive, according to Home and Garden America. Chives, coriander and mint are less demanding.

Cost

Again, prices vary. You can get a window starter kit at Amazon for about $30.

If your gift recipient likes a particular celebrity, you might pay that star to record a personalised video through Cameo. Celebrity options range from Thomas the Tank Engine to Pee-wee Herman and include athletes like Olympic gymnast Gabby Douglas and football legend Joe Montana. There are also musicians like Gloria Estefan and Kenny G, some astronauts and even some political figures like Anthony Scaramucci or Donald Trump Jr. You can even get a video from Iron Chef Jose Garces for the reality show foodie in your life. Or, for those who believe, how about a phone call from Santa Claus?

Cost

Prices range all over the map from $2 for a video from stuntman/actor Preston Corbell to $10 for a conversation with Santa to starting at $2,500 for a video from Caitlyn Jenner.

According to JD Power, the average U.S. household spent $55 a month on streaming tv services, up from $47 just six months before and double the amount spent last year. With so many new options becoming available and prices being hiked all the time as more people stay home for entertainment during the pandemic, it’s easy to see how the cost of entertainment can drag down a family budget.

You can help your tv-watching friends and family with those costs by footing the cost of a subscription to Netflix, Apple TV, HBO Max, Hulu, Amazon Prime, Disney Plus or one of any other of the constantly emerging streaming services.

Gift cards for streaming service are available at participating retailers, including Walmart, Target and Best Buy. You can also buy them online through Amazon.com, Target.com and Walmart.com. The gift-card recipient can use it to create a new subscription or add the value of the card to his existing account.

Cost

Physical Netflix gift cards are available for $30, $60 or $100. You’re free to select the amount for electronic gift cards. (Subscriptions start at $8.99 a month.)

You know that trope about how daily lattes from the coffee shop are the impediment to wealth? It’s more complicated than that. But, if you’d like to press the point, give your favorite coffee lover the means to make the caffeine she craves on her own. Depending on her tastes, you could get her a French press, a drip pot, a single server or an espresso maker. If your budget allows, you might also throw into her stocking your (or her) favorite brand of joe.

Cost

Prices vary. The popular single-serving Keurig machines cost from about $55 to about $200. Tom’s Guide says the best coffee makers can run $300, but you can get a really good one for much less. Tom’s top overall pick, for example, a Braun BrewSense was on sale recently at Best Buy for $76, marked down from $95.

The gift of wisdom can pay off for a lifetime. Fortunately, you can buy some online. Educational software, such as Rosetta Stone for languages or The Great Courses for a variety of subjects including sciences and the fine arts, can be a great gift for your favorite knowledge-seeker. Fun and functional, educational applications can help her brush up on her French before a trip to Paris or add some highly desirable skills to her resume.

If your loved one would prefer learning in an actual classroom, consider getting her a gift card for a local community college. Many can be used for books and merchandise, as well as credit hours.

Cost

You can give a Rosetta Stone eGift instantly—perfect for procrastinators. The Spanish subscriptions range from $36 for three months to $179 for a lifetime subscription.

How much you spend on a community college gift card is up to you and should be based on the college’s cost per credit hour.

Cooking classes can be a great way to cut your recipient’s restaurant costs. Check community calendars for seminars, or look to chains, such as Williams-Sonoma and Sur La Table.

For example, in a number of Sur La Table locations across the country, you can find a holiday cookie decorating class—giving your gift recipients both a cooking lesson and a fun activity to entertain their kids for a couple of hours during the school break.

Cost

Prices at Sur La Table vary, depending on the type of class and location. The holiday cookie decorating class for kids costs $59 per person in stores around the country. Sur La Table also offers online courses recognized by the American Culinary Institute for $59 to $1,500.

Giving an appliance as a present is a bit fraught, but there are plenty of buzzy gadgets that might improve the prospect of more cooking from home. Consider an Entera slow cooker or an Instant Pot or an air fryer. These practical gifts can help the recipient easily prep meals for each week and save on restaurant and take-out bills all year long.

Other kitchen-appliance gift ideas that might encourage more eating in: a standing mixer, pizza stone, countertop convection ovens.popcorn makers, grills, pots and pans and other specialty items.

Cost

Pizza stones are available on Amazon from about $12, while the costs of other kitchen appliances can range into the hundreds of dollars.

A couple of years ago, the idea of a year’s supply of toilet paper as a gift would sound like a bad joke. Now, it might be appreciated. Better yet, though, is to give your recipient access to pallets of TP with a membership to a big-box store such as BJ’s, Costco or Sam’s Club. You’ll give the recipient the opportunity to buy in bulk and save money on groceries, electronics, household wares and other items year-round.

Cost

Annual memberships for Sam’s Club, BJ’s and Costco range from $45 to $120 and can include discounts or gift cards as part of the membership.

Your gift recipient might not ever get rich at the car wash, but helping him with routine car maintenance can sure help save money. And in these times of ever-rising gas prices, every bit of savings helps.

Gift cards to the local car wash would not only foot that bill; keeping an auto fresh and clean can help maximize its life, too. Some locations might even offer unlimited washes for a monthly pass.

You could also put together a gift basket of car-cleaning supplies. Encouraging your loved one to do the dirty work can give them a chance to catch and fix any small issues and prevent any future costly repairs.

Other car-related gift ideas are a membership in AAA or a gift card for car service at a local shop or someplace like Jiffy Lube.

Cost

You’re in the driver’s seat—pick your gift amount. If you want to go the gift basket route, you can order a pre-assembled one on Etsy for about $50

Make room under the tree for your financial planner. A few hours of consultation would be the perfect gift to steer anyone down the right financial path, especially any beloved college kids home for winter break.

Your best bet to give a financial planner’s services for the holidays is to ask your own planner if she’s open to it. You already know and trust her services and won’t have to worry about giving your loved ones a dud gift. If you don’t have a planner to call your own, you can find one at the website of the National Association of Personal Financial Advisors. But be sure to vet the planner properly.

Cost

According to SmartAsset.com, a financial advisor generally charges from $1,500 to $2,500 to create a full financial plan, but if that’s too rich for your budget, you can check to see if the advisor can provide a few hours of consultation or a less detailed plan at a lower cost..

For even your littlest loved one, there’s no better present than an investment in her future. Get her started saving for college by opening a 529 account for her. Or if she already has a college fund, you can simply make a contribution for the holidays. To ensure your generosity is earmarked for a college degree, you can make a direct payment to a 529 plan—you’ll just need to know the account holder’s name and address, as well as the account number. Or you can maintain the element of surprise by giving your future scholar a Gift of College gift card, which can be used to fund any 529 plan.

Cost

You can give however much you’d like. If you go the gift-card route, you’ll have to pay some fees, too.

This handy gift can encourage its recipient to get their hands dirty and keep maintenance costs down by learning to DIY (you might be surprised to see how much you can tackle thanks to YouTube videos). It can be especially useful for anyone in your life who just moved out on their own or bought a new home and recently reached a new level of adulting.

For beginners, some toolbox necessities include a screwdriver set, tape measure, claw hammer, flashlight, pliers and other items, according to This Old House.

Cost

You can build your own kit and control the costs. Ready-made sets start at about $15 at Lowe’s and Home Depot.

Learning the ropes of investing can be intimidating. Kiplinger has put together a list of the 13 best books for beginning investors to take away the mystery and empower people with knowledge about their finances on their own time at their own pace. There’s a book by women for women and one written by a millennial and even one by Warren Buffett.

Cost

The range in costs is free (downloadable e-book) to about $40 for the top-end hardcover

The restaurant industry has been hit particularly hard during the pandemic. One way to support local businesses and give your friend or loved one a night off from cooking is to buy them a gift card from a local restaurant.

If your friend just prefers to do their own cooking, you could also get them a gift certificate to a grocery store or a local specialty food store.

Cost

That’s entirely up to you. Check your local restaurants and see what they’re offering. Maybe check the menu and make sure to cover the cost of your recipient’s favorite food, plus a tip and enough to cover at least one other diner.

Personal-finance wisdom, actionable advice and clear explanations—these are a few of our favorite things. And, hey, we’re proud of what we do. A year’s subscription to Kiplinger’s for your friends and family members will give them both money-saving and money-making strategies.

Cost

A holiday subscription starts in January and can be had for just $19.95 for 12 monthly issues.

Five of the largest and best-known companies in the world are the FAANG stocks.

Or the FAAMNGs. Or the FANTAMANs. Whatever the acronym of the day is.

The original "FANGs" – Facebook, Apple, Netflix and Google – was a clever way to refer to four mega-cap tech stocks. But as other companies grew, and some of the original names changed, this alphabet soup evolved. FANGs became the FAANGs, then morphed into other less popular iterations.

The reason these acronyms stick around is because they collectively have a massive impact on the major U.S. stock market indexes thanks to their size. In fact, seven technology or tech-adjacent mega-caps – Apple (AAPL), Microsoft (MSFT), Amazon.com (AMZN), Facebook parent Meta Platforms (FB), Google parent Alphabet (GOOGL), Netflix (NFLX) and Tesla (TSLA) – account for roughly half of the weight of the Nasdaq-100 index and more than a fifth of the S&P 500.

However, for several of these stocks, their prominence has also resulted in rich valuations and share price gains that have outstripped profit growth, making them difficult for value-minded investors to swallow.

Fortunately, you can partake in the impressive business models of these mega-cap stocks without necessarily paying an exorbitant share price. The strategy is simple: Buy shares of businesses that provide products or services to these companies and thus benefit peripherally from the group's phenomenal growth. FAANG stocks and other giant tech firms drive outsized revenue and profit gains for their value-added resellers (VARs), software developers, component manufacturers, landlords and dozens of other business partners.

Here are seven better ways to make money off FAANG stocks. The names featured here are riding the coattails of their mega-cap partners to outsized top- and bottom-line growth. Better still, most are valued at cheaper price-to-earnings (P/E) multiples than the FAANGs they partner with, suggesting these names may still have room to run.

Data is as of Nov. 9.

• FAANG/Mega-cap relationship: Meta Platforms
• Market value: $8.5 billion

Zynga (ZNGA, $7.65) is an industry leader in mobile game development. The company initially built market share by partnering with Meta to launch mobile games like Zynga Poker, Words with Friends and Farmville that are multi-generational franchises.

It has since established download partnerships with FAANG stocks AAPL and GOOGL and, most recently, teamed up with social media firm Snap's (SNAP) Snapchat. The company's portfolio of gaming titles has been downloaded more than 4 billion times on mobile devices and reaches customers in over 175 countries.

In March, Zynga acquired cross-platform game developer Echtra Games, a move that should help extend its reach from mobile devices into PCs and consoles and expand its addressable market. And in August, the company bought Chartboost, a mobile advertising firm. Combining Chartboost's advertising and monetization platform that has an audience of roughly 700 million monthly users with Zynga's games should be a catalyst for revenue growth.

More good news for Zynga arrived in September when a California judge ruled that Apple cannot prevent game developers from bypassing its App Store and the 15%-30% commissions the tech giant charges on app purchases. This ruling enables gaming companies to reduce costs and retain a higher percentage of revenues.

In the third quarter, Zynga's bookings rose 6.4% year-over-year to $668 million and revenues surged 40.2% to $705 million. The company also reported $1.3 billion in cash and investments, up 76.8% from Q3 2020, which it says it will use to fund future acquisitions.

Over the last three years, Zynga has grown revenues 45% annually and has more than doubled normalized net income and levered free cash flow – the amount of cash a company has on hand after meeting its financial obligations – on an annual basis.

Wall Street analysts are bullish on ZNGA, too. Of the 19 following the stock that are tracked by S&P Global Market Intelligence, 13 say it's a Strong Buy, five call it a Buy and one rates it at Sell. Plus, the pros' consensus price target of $11.12 represents implied upside of 45.4% over the next 12 months or so.

• FAANG/Mega-cap relationship: Apple
• Market value: $187.7 billion

Qualcomm (QCOM, $166.74) has benefitted from its long – not always amicable – relationship with Apple and remains a key chip supplier for new iPhone models. Apple's 5G enabled iPhone 12 uses QCOM chips and teardowns of the recently launched iPhone 13 show it contains Qualcomm modems.

Apple is starting to design its own chips, but Qualcomm should continue to be at the forefront of the transition to 5G technology. According to QCOM, its Snapdragon processors offer the fastest 5G speeds available, with devices powered by these chips downloading content roughly 67% faster than the next largest competitor. Over 225 million 5G enabled smartphones shipped in 2020 and J.P. Morgan Research estimates this volume will more than double to 525 million this year and hit 725 million in 2022.

QCOM is further hedging its bets by making big investments in the Internet-of-Things (IoT) and in connected cars. During this year's September quarter, Qualcomm's IoT revenues rose 66% year-over-year to $1.5 billion. The global industrial IoT market was valued at $216 billion in 2020, according to market research firm Grand View Research, and is projected to grow 23% annually through 2028.

Qualcomm's product offerings for connected cars range from telematics to connectivity platforms and digital cockpits. Two years ago, less than 50% of new cars incorporated internet connectivity, but that percentage is expected to rise to 70% by 2025. QCOM's automotive revenues increased 44% during the September quarter to $270 million and reached $975 million for all of fiscal 2021.

Supporting this growth is the company's recent acquisition of Arriver whose driver assistance assets will be integrated into Qualcomm's own ADAS (advanced driver assistance systems) platform.

QCOM's revenues increased 43% year-over-year to $9.3 billion during the September quarter and adjusted earnings per share of $2.55 were up 76%. In its fiscal first quarter, the company is guiding for revenues of $10.0 billion to $10.8 billion and adjusted EPS to arrive between $2.90 and $3.10.

Of the 32 analysts covering the shares tracked by S&P Global Market Intelligence, 16 call it a Strong Buy, six say Buy and 10 have it at Hold. QCOM shares trade at a reasonable 15.8 times forward earnings – well below AAPL's forward P/E ratio of 27.

• FAANG/Mega-cap relationship: Netflix
• Market value: $63.0 billion

Roblox (RBLX, $109.52) develops on-line gaming platforms that offer users an immersive, virtual 3D experience. Last year's pandemic-induced lockdown fueled a surge in new players and was a major growth catalyst for the company. The number of daily active users on its platforms is up 31% from one year ago to 47.3 million. Although not yet profitable, revenues for RBLX more than doubled in the September quarter to $509.3 million and free cash flow rose 7% to $170.6 million.

The company is poised for even stronger growth in the second half of this year thanks to the recent launch of its 3D game that mimics "Squid Game" – Netflix's hugely popular new TV series. Since its mid-September release, the South Korean horror/drama about players in a deadly tournament of children's games has become Netflix's most-watched series to date, with interest already exceeding previous hits like "Stranger Things," which was also the theme of a sponsored Roblox event.

Netflix is not Roblox's only partner. The company teamed up with Sony Music Entertainment in July to build metaverse music experiences around Sony artists and create new revenue streams tied to virtual entertainment.

Analysts forecast 47% revenue growth for RBLX this year, followed by 20% annual growth over the next two years.

Of the 10 analysts following RBLX stock tracked by S&P Global Market Intelligence, four call it a Strong Buy, three say Buy, two believe it's a Hold and one deems it a Sell. CFRA Research analyst John Freeman is one of those with a Strong Buy rating on RBLX, calling the company's third-quarter results "outstanding" and projecting "even stronger preliminary numbers" for the start of the fourth quarter.

The stock surged more than 40% in the wake of its solid third-quarter earnings report, so this may be one to watch for an entry point on price weakness.

• FAANG/Mega-cap relationship: Amazon
• Market value: $109.8 billion

A simple and safe way to capitalize on Amazon's stellar growth is to own shares of its largest landlord, Prologis (PLD, $148.45). This preferred partner of most leading e-commerce and logistics businesses is also the world's largest warehouse real estate investment trust (REIT). Prologis owns roughly 4,700 properties totaling nearly 1 billion square feet of leasable space and has operations across 19 countries.

The FAANG member is PLD's largest tenant by far, accounting for roughly 22 million square feet of leasing space and 6.1% of net rents. Prologis' next largest tenants are Home Depot (HD, FedEx (FDX), UPS (UPS) and XPO Logistics (XPO). Together these four firms contribute 6.1% of annual rents.

The e-commerce tailwinds that help Prologis show no signs of slowing. During the pandemic, customers increasingly shopped online and that trend continues to build. According to market research firm eMarketer, online purchases in the U.S. are forecast to rise from approximately $709.8 billion – or 14.5% of all retail sales – currently to $1.0 trillion, or 18.1% of retail sales, in three years. And this trend could fuel demand for an additional 1.0 billion square feet of warehouse space by 2025, says global commercial real estate services firm JLL.

According to Prologis, every $1 billion increase in e-commerce sales creates demand for another 1.2 million square feet of warehouse space. Amazon alone added $49.4 billion to sales in the third quarter.

Prologis has consistently ranked among the best-performing REITs in the warehouse sector. On an annual basis, core FFO (funds from operations, a key REIT earnings metric) per share has risen 10% and dividends have risen 9% over the past five years.

During the September quarter, Prologis CEO Hamid R. Moghadam said vacancies were at unprecedented lows and that "space in our markets is effectively sold out." The REIT is guiding for roughly 7% core FFO per share growth in 2021, supported by an industry-leading balance sheet and a land portfolio with an estimated $21 billion buildout potential.

Barclays analyst Anthony Powell initiated coverage of PLD with an Overweight (Buy) rating in September, saying industrial is his favorite REIT subsector. CFRA Research analyst Stewart Glickman recently said "fundamentals point to an enviable supply-demand situation heading into 2022," but lowered his rating from Strong Buy to Hold recently due to price gains on PLD stock that have outpaced its REIT peers so far this year.

• FAANG/Mega-cap relationship: Alphabet (Google)
• Market value: $72.8 billion

Workday (WDAY, $293.48) hit the ground running ahead of its October 2012 initial public offering (IPO) by signing search giant Google as one of its first customers. Google replaced parts of its internally developed human resources (HR) software with Workday software. Since then, WDAY has become the industry leader in cloud-based software that helps companies manage finance, HR and strategic planning functions.

Workday has grown to more than 55 million users worldwide and claims over 50% of Fortune 500 companies as customers.

The company delivered a stellar June quarter with revenues up nearly 19% year-over-year to $1.26 billion, fueled by a 20% rise in subscription revenues. Workday's adjusted EPS came in at $1.23, more than 46% higher than the year prior, and the company raised its full-year guidance for subscription revenues and operating margins.

Workday's new strategic partnership with Google Cloud is expected to spur growth for both companies by enabling customers to deploy Workday finance, HR and strategic planning software on Google Cloud. The multi-year partnership also includes co-marketing and cross-selling programs to increase new business opportunities across the U.S. In addition, the two companies plan to explore opportunities to co-develop cloud-based applications for customers in the retail, healthcare and financial services industries.

Google subscribed to additional products in September – Workday Adaptive Planning, Workday Extend, Workday Prism Analytics and Workday Strategic Sourcing – and expanded its use of WDAY human resources tools by adding new applications.

Barclays analyst Raimo Lenschow upgraded WDAY shares to Overweight in August based on his expectations of increased IT spending in the second half of 2021. Most analysts are bullish on Workday. Of the 34 covering the stock tracked by S&P Global Market Intelligence, 19 say it's a Strong Buy, 9 believe it's a Buy, five deem it Hold and one calls it a Sell.

Plus, the company is forecast to grow EPS 26% annually over the next three-to-five years, or nearly twice the anticipated growth rate of the overall IT sector.

• FAANG/Mega-cap relationship: Microsoft
• Market value: $8.5 billion

Arrow Electronics (ARW, $119.98) built its business supplying semiconductors to original equipment and contract manufacturers. The company has been a Microsoft partner for over a decade, providing electronics and services that are directly integrated into MSFT portals for service provisioning and configuration. In 2019, Microsoft named the company its Indirect Provider of the Year.

More recently the company began offering enterprise computing software for data center, cloud, security and analytics services. Already a Microsoft Cloud Service Provider, Arrow is partnering with MSFT to deploy tools on its Azure platform that speed development of IoT solutions. By participating in the IoT space, Arrow benefits from an expected surge in global IoT spending.

Earlier this year, Arrow expanded its relationship with one of the original FAANG stocks: Amazon.com. Per its agreement with Amazon Web Services (AWS), Arrow will be able to resell, manage, service, support and bill AWS accounts on behalf of their customers. Arrow is also working with AWS to support OEM customers that are building smart devices incorporating the cloud technology.

Thanks to its massive scale, Arrow was able to secure semiconductor inventories in 2021 that many competitors could not. As a result, the company's September quarter sales improved 18% year-over-year and EPS rose 94%. Analysts think Arrow will improve on its impressive EPS growth rate by delivering 17% annual EPS gains over the next three to five years.

ARW shares are cheap, too, trading at 6.8 times forward earnings. For the sake of comparison, Microsoft's forward P/E ratio is 36.8 and Amazon's is 55.9.

• FAANG/Mega-cap relationship: Tesla
• Market value: $603.1 million

Modine Manufacturing (MOD, $11.63) designs, manufactures and sells heat transfer products used by customers in the HVAC systems, commercial and industrial, heavy-duty equipment and automotive markets.

The company has long been a key supplier of battery chilling technologies to Tesla, the world's largest manufacturer of electric vehicles (EVs). In the first nine months of 2021, TSLA produced nearly 625,000 vehicles – up almost 88% from the year prior.

Demand for electric vehicles is forecast to rise nearly 22% annually to 233.9 million units by 2027 – valuing the market at nearly $2.5 trillion by 2027 – according to market research firm Meticulous Research. Wisconsin-based Modine's established relationship with Tesla could become a major growth catalyst, particularly if worsening trade relationships with China cause Tesla to shift more of its business to reliable U.S. suppliers.

Modine recently sold its traditional automotive business and plans to focus more resources on computer data center cooling products, industrial HVAC and electric vehicles. Expanding in more profitable niches will enable Modine to increase operating margins and free cash flow and to accelerate repayment of debt.

In September, Modine said it is creating a separate business unit focused exclusively on cooling technologies for electric vehicles. The company is in discussions with 30 customers, has commenced production on three programs and won five additional contracts that will launch over the next 12 months.

Modine achieved double-digit sales growth in three out of four of its business units during the September quarter, though total year-over-year revenue growth came to a more modest 4% amid supply chain issues, a global semiconductor shortage and a loss associated with the sale of its air-cooled automotive segment.

Modine has Strong Buy ratings from both of the Wall Street analysts tracking the stock. It also looks bargain-priced at 7.5 times forward earnings – especially when compared to TSLA's forward P/E ratio of 26.7.

Will Netflix (NFLX, $532.22) post another quarter of disappointing global subscriber additions?

Netflix is scheduled to unveil its second-quarter results after the market closes next Tuesday, July 20. Thus, the streaming giant will be the first of the FAANG stocks to report quarterly earnings this season. Analysts, on average, are looking for revenues of $7.3 billion (+20.3% year-over-year) and earnings per share (EPS) of $3.15, nearly double what NFLX brought in one year ago.

Investors will also be watching global paid subscriber additions. In its first-quarter report, Netflix missed this metric by a wide margin – adding just shy of 4.0 net new subscribers over the three-month period, compared to expectations for 6.2 million – which sent the shares tumbling 7.4% in the subsequent session.

Wedbush analysts rate NFLX at Underperform (the equivalent of a Sell) with a 12-month price target of $342, representing a steep discount to its current per-share price. As far as subscriber adds go, the research firm sees "compelling" opportunities overseas, but believes it may be approaching "market saturation" in the U.S. and Canada.

"While there may be some room for Netflix to add some new high-ARPU (average revenue per unit) subscribers, competition is at its most fierce in the region, and with over half of all households already penetrated, the 'low hanging fruit' (above median income households) has already been harvested," the analysts say. Wedbush is projecting 1 million net additions for NFLX in the second quarter.

Not everyone is bearish on NFLX.

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Baird analysts William Power and Charles Erlikh carry an Outperform (Buy) rating on the stock with a $650 price target, implying 21.1% upside over the next 12 months or so. "Both current and upcoming content should reinvigorate subscriber growth for NFLX," the analysts say.

Johnson & Johnson Looks to Turn Around 2021 Underperformance

Johnson & Johnson (JNJ, $168.68) has been in the news lately as the pharmaceutical giant's COVID-19 vaccine has been linked to roughly 100 cases of Guillain-Barré syndrome – a rare neurological disorder. The company also recalled five of its aerosol sunscreen products due to the detection of benzene, a carcinogenic chemical compound.

These headlines have the stock headed for a modest weekly loss; overall, it's up about 7% for the year to date to easily underperform the major indexes. JNJ shareholders are looking for the stock to add to those gains when the company reports second-quarter earnings ahead of the open this Wednesday, July 21.

The pros are upbeat heading into the report. On average, they're looking for a 26% year-over-year pop in revenues to $22.2 billion, with earnings expected to rise 36% to $2.27 per share.

CFRA analyst Sel Hardy (Buy) recently lifted her full-year 2021, 2022 and 2023 adjusted EPS forecasts for JNJ "to reflect the improved outlook for the company's top- and bottom-line performance. In line with the broader reopening in the U.S., JNJ's largest market, we anticipate an improved momentum particularly for the company's key Pharma and Medical Devices segments."

This bullish bias toward the Dow stock is seen among the majority of analysts covering the shares that are tracked by S&P Global Market Intelligence. Currently, nine maintain a Strong Buy opinion, four say Buy, five call JNJ a Hold and just one deems it a Sell.

Can American Express Add to Its Gains?

American Express (AXP, $170.35) caps off a busy week of corporate earnings reports when it reveals its second-quarter results ahead of the July 23 open.

The stock has put in a tremendous showing in 2021, up 41% for the year to date – and trading not far from its July 1 record high of $173.60.

Piper Sandler analyst Christopher Donat thinks there's more to come for the credit card concern and recently raised his price target on AXP to $190 from $170, representing expected upside of 11.4% over the next 12 months or so. He maintains an Overweight rating on the shares, which is the equivalent of a Buy.

"American Express reported another excellent month for credit quality [in June]," Donat says, with both net write-offs and delinquency rates falling to the lowest level since Piper Sandler first started tracking the data in 2012.

"Meanwhile, card loan growth continued, with AXP the only large credit card issuer to post year-over-year loan growth in June. We think AXP's loan growth likely reflects higher spending on Amex cards, which should have positive implications for 2Q21 discount revenue."

On average, analysts are expecting American Express revenues to arrive at $9.5 billion (+17% from the year-ago period) in its second quarter. As for earnings, they're forecast to spike 445% on a year-over-year basis to $1.58 per share.

We waited years for the video streaming war to begin.

Well, it's here. It's heated. And it involves a host of well-backed streaming video stocks vying for relevancy amid a jam-packed crowd.

Netflix (NFLX) largely had its way over the past decade. It licensed popular content from other media companies and supplemented that with its own shows, becoming the undisputed industry leader along the way. Netflix started offering its streaming video service in 2007, and by the end of 2018 it claimed 139 million subscribers. In that time, the company faced a few half-hearted attempts to grab a piece of the pie.

But in the past 18 months or so, the video streaming war has really gotten legs. Netflix has been losing content from its library as new streaming services bring their TV shows and movies back under their own umbrella as exclusives.

Apple (AAPL) launched Apple TV+ on Nov. 1, 2019. Just two weeks later, Walt Disney (DIS) launched Disney+. In May 2020, AT&T (T) launched HBO Max followed by Comcast's (CMCSA) NBC Peacock, which went live in July 2020. The latest big entry took place in January of this year, when Discovery (DISCA) launched its Discovery+ streaming service.

And given very recent news, HBO and Discovery+ could soon become an even bigger threat.

These represent just a few of the now dozens of video streaming services competing for consumer dollars and threatening to upend the traditional TV viewing industry. We're reaching the point where at least a few clear winners and possible losers are beginning to come into focus. After all, consumers first switched to Netflix to save on their cable bills. Even if fragmented content convinces many viewers to have multiple subscriptions, few are going to pony up to all the streaming services.

Here's a look at the major streaming video stocks, and how their offerings appear poised in the current content landscape.

Data is as of May 16.

• Market value: $218.8 billion
• Streaming services: Netflix

Netflix (NFLX, $493.37) is the grandaddy of all the video streaming services, and the one to beat. The company started life as a mail order DVD rental service – taking on Blockbuster Video – before announcing in 2007 that it would begin streaming movies to its 6.3 million subscribers.

That move started inauspiciously, with the customers able to choose from 1,000 mostly older movie titles to stream over their PC as part of their $18-per-month DVD rental subscription.

But streaming video quickly gained momentum.

In 2008, Netflix made a huge move into taking video streaming mainstream. The company began snapping up the streaming rights for movies and TV shows, taking advantage of a disorganized marketplace and the desire by media companies to make "easy money." Recode describes what happened as a result:

"Netflix took the stuff Hollywood considered its leftovers and built a giant business with it – and ended up competing directly with the established media players, using their own content."

That content became more expensive over time as studios realized what had happened. When Netflix first acquired the rights to Disney movies in 2008, it paid $30 million; renewing that deal in 2012 cost $300 million. Netflix also began to invest heavily in producing its own content, releasing exclusive shows such as House of Cards and Stranger Things. NFLX spent more than $17 billion on original content in 2020, and that's projected to increase to a hair over $19 billion this year.

That spending has had to ramp up because now that other streaming video stocks have arrived in full force, Netflix is losing the rights to some of its most popular shows and movies. For example, Disney titles are all but gone, and The Office – the service's most watched show – disappeared this year, moving to NBC's Peacock.

NFLX faces three big challenges as the streaming wars kick off:

1. Escalating costs for its content library, which is becoming more reliant on original material.
2. Preventing churn, where subscribers ditch its service for the competition.
3. Growth. Netflix currently has around 208 million subscribers worldwide. It has tapped most of the potential in the lucrative North American market. It has much more market to eat in the EMEA (Europe, Middle East and Africa) and the Asia Pacific regions, though subscribers there don't generate as much in revenues.

RBC Capital Markets analyst Mark Mahaney says if Netflix can replicate its current 57% penetration rate among U.S. households in global markets, it could add nearly half a billion subscribers. He calculates that kind of subscriber base would translate into earnings of $50 per share, and a $1,000 share price for NFLX within five years.

Netflix remains the king of streaming video, though growth will be more difficult to come by.

• Market value: $269.6 billion
• Streaming services: Peacock

Comcast's (CMCSA, $58.68) NBCUniversal media arm was one of the inadvertent early catalysts for the phenomenal growth of Netflix. Two of the top three most viewed TV shows on Netflix in 2018 – by a huge margin – were NBC properties: The Office and Parks and Recreation.

NBC's Peacock is the latest of the big video streaming services to launch and features the network's most popular series. The Office became a Peacock exclusive in January 2021, when the Netflix license expired. Peacock also will produce its own new programming. While the focus of this new streaming service is on TV shows, Peacock also has a library of movies available.

Comcast is hoping to extend the reach of Peacock by offering the service with a free, ad-supported tier that has limited programming. Premium service with access to the complete content library without advertising starts at $4.99 per month for Comcast cable subscribers. Non-subscribers can also access that premium tier for $9.99, undercutting Netflix.

Peacock is late to the game, but it's seen as a necessary move for Comcast. The company lost 671,000 residential cable subscribers in 2019. NBCUniversal's cable network revenue dropped 2.2% that year. Peacock is a play to appeal to cord cutters as a Netflix alternative, but it also can be used as an enticement to keep Comcast cable subscribers onboard. In addition, the free, ad-supported tier offers an alternative to consumers who don't want to pay for another streaming service.

Last year, Comcast said it expected to spend $2 billion on Peacock between 2020 to 2021 to grow the service. It expects to have 30 million to 35 million subscribers by 2024, and generate $2.5 billion in annual revenues.

• Market value: $315.3 billion
• Streaming services: Disney+, Hulu, ESPN+

Walt Disney (DIS, $173.70) has proven to be a savvy player when it comes to video streaming, and the company has positioned itself to become a powerhouse that rivals Netflix.

Disney was an early investor in Hulu – a U.S.-only streaming service with both paid and free, ad-supported tiers. In 2019, Disney bought out Comcast's stake to take full control of Hulu. This gave it an established streaming service with 28 million subscribers at the time.

Hulu will lose its NBC TV content, but it still gives Disney a platform where it can stream more mature content that might not be suitable for its family-friendly Disney+ offering. (Don't forget: Disney now owns not just ABC and its TV catalog, but also the TV and movie libraries of 21st Century Fox.)

The company's big-ticket entry is Disney+, which has proven to be an even bigger success than expected. The coronavirus pandemic hasn't hurt – its European launch during the height of the COVID-19 lockdown put more pressure on already strained regional internet infrastructure, requiring Disney to temporarily lower the video quality.

But Disney+ was always going to be a big deal, especially for families. The streaming service has exclusive access to Disney's back catalog of animated movies, as well as Marvel and Star Wars properties. Disney also has invested in new content, including The Mandalorian, which became the most streamed show in the U.S. shortly after launch.

Disney, which hoped to hit 30 million subscribers by the end of 2024, announced last May that it had signed up 54.5 million. By March, that number topped 100 million. The ability to bundle Disney+ with its other services has also had a halo effect, boosting subscribers for Hulu and Disney's ESPN+ sports.

Barely a streaming presence as 2019 wound down, Disney is now one of the top streaming video stocks. It's a clear winner. In fact, streaming revenues have helped counter the losses from closes parks and canceled cruises, allowing Disney to report a surprise profit for its fiscal first quarter.

• Market value: $1.6 trillion
• Streaming services: Amazon Prime Video

Amazon.com's (AMZN, $3,222.90) Amazon Prime Video is an interesting case. It has been around for a long time in one form or another (starting as Amazon Unbox in 2006). The company licenses content, but also spends a lot of money on original programming – to the tune of an estimated $7 billion in 2019.

You can subscribe to Amazon Prime Video for $8.99 month. However, Amazon isn't really running this video streaming service just to compete against other streaming video stocks. Instead, Prime Video is one of the big enticements to paying for an Amazon Prime membership. A $12.99 monthly Prime membership includes free shipping and other benefits, along with free access to Amazon Prime Video.

That Amazon Prime membership is a big deal for Amazon. In 2018, Prime members spent an estimated $1,400 on average shopping on Amazon.com, compared to $600 for non-Prime members. With 200 million paying Prime members worldwide, that extra spending adds up quickly.

Amazon Web Services (AWS) might be the company's profit center, but e-commerce still accounts for 90% of AMZN revenue. Keeping those online sales growing is a key driver of Amazon stock. That makes the company's ongoing investment in Amazon Prime Video a smart move, regardless of whether it's actually making money from video-specific subscriptions.

• Market value: $2.1 trillion
• Streaming services: Apple TV+

Apple (AAPL, $127.45) has had a long presence in TV streaming hardware (the Apple TV) and video rentals/purchases (iTunes). However, in November 2019, the company joined the video streaming race with its Apple TV+ service.

At $4.99 monthly, Apple TV+ is considerably cheaper than other streaming video services. But there's a catch – the content is all-new, exclusive shows and movies. There's no library of favorites licensed from other media companies. Apple reportedly spent $6 billion on producing content for its launch lineup, but it's still pretty thin.

What's Apple's spin on streaming video, since Apple+ doesn't seem like it's in position to directly compete against the market's top streaming video stocks?

Apple TV+ has two key goals. The first is to boost revenue for its Services division, which has become increasingly important as iPhone sales slide. In its fiscal second quarter ended in March, that Services revenue hit $16.9 billion. That's up 26.7% compared to last year and makes Services the company's second-largest revenue generator, after the $47.9 billion that iPhone sales brought in.

The second goal is part of a tried-and-true Apple strategy: keep people locked into the Apple ecosystem. Look no further than the fact that the company gives away a free year of Apple TV+ with the purchase of an iPhone, iPad, Apple TV or Mac computer for proof. Apple TV+ is another enticement to keep customers buying Apple products.

• Market value: $1.5 trillion
• Streaming services: YouTube Premium

Alphabet's (GOOGL, $2,278.38) Google is a streaming pioneer. Its YouTube brand offers a wide range of streaming services including YouTube TV – a paid alternative to cable with up to 70 live network TV channels) – and the free original YouTube, which has been an online streaming video fixture since Google bought it in 2006.

But Alphabet's legit contender to take on Netflix is YouTube Premium, which costs $11.99 per month.

Google isn't really playing the same game as everyone else. YouTube Premium's key value proposition for subscribers is getting to watch all the videos shared on the free site without having to sit through annoying ads. (The company also throws in access to YouTube Music for free.)

Google has paid for a smattering of original TV shows and movies, but it's the user-generated content that's front and center – just without ads. This approach has made YouTube Premium popular with millennials.

In 2020, Google broke out the advertising revenue for YouTube for the first time. It amounted to an astounding $15.15 billion in 2019. It brought in $6 billion during Q1 2021 alone, up 49% year-over-year. That's just ad revenue, which doesn't include subscriptions for YouTube TV or YouTube Premium.

YouTube and YouTube Premium don't compete directly with other streaming video services in the traditional sense, but YouTube Premium will be tough competition if consumers are forced to narrow down their choices of which streaming video services to pay for. Especially if those consumers are in younger demographics.

• Market value: $25.2 billion
• Streaming services: Paramount+

Do you subscribe to ViacomCBS's (VIAC, $38.91) Paramount+?

Unfortunately for ViacomCBS, the likely answer is: probably not.

Paramount+ is the new name for CBS All Access, which launched in 2014 and is priced at $5.99 per month with commercials, $9.99 without. And despite more than six years of operation, a library of over 12,000 CBC TV show episodes, original content like Star Trek: Picard and access to live sports, All Access/Paramount+ hasn't made a huge splash in the streaming TV market.

In February, ahead of the changeover to Paramount+, ViacomCBS said it had 30 million subscribers across all its platforms. Admittedly, that includes some significant growth – its 17.9 million domestic subscribers were up 73% year-over-year. But it remains notably light on subscribers compared to larger services such as Netflix and Disney+.

Streaming revenues also aren't much compared to what ViacomCBS gets for licensing its content elsewhere. Combined streaming ad and streaming subscription revenues of $816 million, while up 65% year-over-year, are still less than half of VIAC's $1.8 billion-plus in "licensing and other" revenues.

Relatively low penetration, and the high value of its content library when licensed to other services, could result in Paramount+ eventually becoming a casualty in the streaming wars.

• Market value: $230.2 billion
• Streaming services: HBO Max

AT&T (T, $32.24) owns HBO Max, a new streaming video service that offers the programming of HBO, content from WarnerMedia and a rotating selection of movies. At $14.99, it's on the expensive side, but AT&T is providing free access to most customers who already subscribe to HBO on cable.

HBO Max launched last May, and the company will be phasing out its existing HBO Go service.

One of the HBO Max wins – courtesy of the that WarnerMedia library – is Friends. The one-time second most-watched show on Netflix is now an HBO Max exclusive. The deal cost AT&T, though. Last January, the company said its WarnerMedia division lost $1.2 billion in revenue by forgoing licensing deals to make content available to HBO Max.

That said, AT&T's place in the streaming wars has changed overnight.

In the latest shakeup, on May 17, AT&T announced a deal that would see it spin off WarnerMedia and combine those assets with Discovery, creating a standalone streaming media powerhouse to take on market leaders Netflix and Disney+. Pending regulatory approval, the deal is expected to be completed by mid-2022.

There is no word yet in in terms of what this development holds for existing streaming services run by the two companies including Discovery+ and HBO Max. They could be kept separate or combined into a "mega" streaming service.

We explain what this could mean for current AT&T shareholders in a breakdown of the AT&T-WarnerMedia-Discovery deal.

• Market value: $18.0 billion
• Streaming services: Discovery+

One of the latest big-player newcomers to the streaming wars is Discovery+, launched on Jan. 4 by Discovery Communications (DISCA, $35.65).

The streaming service offers more than 55,000 episodes spanning over 30 years of programming from the company's networks, including HGTV, A&E, Discovery Channel and the Food Network. Monthly subscriptions cost $4.99 with advertising, or $6.99 per month without ads.

It also offers a free one-year subscription to select Verizon (VZ) customers.

In its first-quarter earnings report, the company said Discovery+ subscribers had already topped 13 million. However, that did come at the cost of sliding subscribers from its cable portfolio, which dropped 4% during the same period.

But like with HBO Max, this becomes a more difficult service to handicap amid the pending deal with AT&T. It's possible the two services are merged in what would be a much more appealing offering likelier to compete with the market's largest streaming video stocks.

Shareholders in AT&T (T, $32.24) aren’t quite sure just how to react to Monday's news that the company would essentially undo its $85 billion acquisition of Time Warner – a deal that was widely criticized when it closed in 2018.

Indeed, shares in the blue-chip telecommunications giant popped as much as 4.8% at one point in Monday's early trading. However, those gains were pared back significantly by the early afternoon.

Income investors who have come to count on AT&T's generous dividend (currently yielding 6.5%) might want to hold their applause, however.

AT&T signaled that it will cut its dividend to reflect the company's smaller size once it spins off its media business into a separate entity.

Based on what shareholders get out of the deal, that’s not necessarily a bad thing. But it does make it all the more important for current and prospective T shareholders to understand the ins and outs of this pending deal, and AT&T's new place in the streaming video wars.

The AT&T-WarnerMedia-Discovery Deal

AT&T and Discovery Communications (DISCA, $35.65) rocked the communications industry before Monday’s opening bell by announcing a mega-deal that would combine their formidable cable and streaming media assets.

AT&T, which says it expects to receive $43 billion between cash and securities in the deal, will spin off WarnerMedia properties such as HBO, CNN, TNT, TBS and Warner Bros Studios. Those properties will combine with Discovery assets such as Food Network, Animal Planet and HGTV to form a new publicly traded company. The as-yet-to-be-named media firm will also own streaming media assets HBO Max and the newly launched Discovery+.

T and DISCA hope that the resulting entity will possess the scale and resources to compete with the likes of Netflix (NFLX) and Walt Disney (DIS) in the rapidly expanding streaming media business.

The new company – which is expected to be formed by mid-2022 – will have some catching up to do. HBO Max and HBO combined have about 44 million U.S. subscribers. Discovery+ has roughly 15 million subscribers. Meanwhile, Netflix has more than 200 million global subscribers, and Disney+ has more than 100 million.

But back to AT&T.

Why Is the Dividend Getting Cut?

AT&T said it expects an annual dividend payout ratio of 40% to 43% from more than $20 billion of expected free cash flow. That implies a total payout of between $8 billion and $8.6 billion.

That would represent a steep drop from the $15 billion AT&T paid in dividends in 2020, when free cash flow – or the cash left over after operating costs and capital investments – came to more than $40 million. Morgan Stanley analyst Simon Flannery points out that it would mark "a nearly 50% reduction from current levels ... and would put the stock on a low 4% (yield)."

Although income investors might have to accept less in the way of dividend income, that doesn't mean this is automatically a bad deal for them.

For one thing, it bolsters T's balance sheet. The telco took on tremendous debt when it acquired Time Warner. As of March 31, AT&T carried net debt of $169 billion.

Some analysts and investors worry that the sheer weight of all that debt hampers AT&T's financial flexibility. Telecoms have enormous capital expenditures. They must continuously expand, maintain and upgrade their networks.

The advent of next-generation ultra-high-speed networks only adds to the cost pressure. Indeed, AT&T spent $23.4 billion on wireless spectrum licenses in the Federal Communications Commission's most recent round of auctions.

And although AT&T is spinning off its media assets, the structure of the deal with Discovery still allows current T shareholders the potential to profit from the growth of streaming media and content in general.

Under terms of the deal, AT&T shareholders will hold a 71% stake in the combined media company, in the form of new shares. Discovery shareholders will own the remaining 29% stake. In return, AT&T will receive $43 billion of cash, debt securities and WarnerMedia’s retention of certain debt. The new media company will carry about $55 billion in debt.

Whether the new media company pays dividends remains to be seen, but it certainly will have higher growth prospects than AT&T. But the eventual spinoff and new shares will force current holders of both T and DISCA to re-evaluate their holdings.

Bank of America Global Securities analysts, who rate T at Buy, are optimistic about what this deal could mean for shareholders.

"Given a choice between acquiring new media assets and spinning out a pure play, we believe shareholders are benefited by the latter," writes BofA analyst David Barden in a note to clients. "A combined entity would have an enhanced ability to offer the widest variety of content to attract the largest possible subscriber base on a global basis."

The best Nasdaq stocks for new money look quite different than they did just a few months ago.

Last year, the technology-heavy Nasdaq Composite, led by mega-market-value stocks such as the FAANGs – Facebook (FB), Apple (AAPL), Amazon.com (AMZN), Netflix (NFLX) and Google parent Alphabet (GOOGL) – could almost do no wrong.

Indeed, the Nasdaq gained almost 44% on a price basis alone in 2020, leaving the broader S&P 500 (+7.3%) and blue-chip Dow Jones Industrial Average (+16.3%) far behind in its wake.

But now inflation fears and a general rotation away from growth stocks toward more value-oriented names has made finding winning Nasdaq stocks a much tougher beat. The index was up a meager 1.1% for the year-to-date through May 12. That compares unfavorably to gains of 8.2% for the S&P 500 and 9.7% for the Dow, respectively.

Although many of last year's best Nasdaq stocks have continued their winning ways, it has been harder to find promising prospects off the beaten path. So we decided to suss out some names that Wall Street analysts identify as being the best Nasdaq stocks.

To that end, we used S&P Global Market Intelligence to screen the Nasdaq Composite for stocks with the highest-conviction Strong Buy recommendations on the Street.

Here's how it works: S&P Global Market Intelligence surveys analysts' stock ratings and scores them on a five-point scale, where 1.0 equals Strong Buy and 5.0 means Strong Sell. Any score of 2.5 or lower means that analysts, on average, rate the stock a Buy. The closer the score gets to 1.0, the stronger the Strong Buy call.

We limited ourselves to stocks with at least 10 Strong Buy recommendations. Then we dove into analysts' research, fundamental factors and analysts' estimates.

The result? This list of 11 Nasdaq stocks with Strong Buy consensus recommendations. True, it's only a beginning, but this isn't a bad place to start when looking for the best Nasdaq stocks to buy during this tough time for the index.

Share prices are as of May 12. Data and analysts' recommendations are courtesy of S&P Global Market Intelligence, unless otherwise noted. Stocks are listed by strength of analysts' consensus recommendation, from weakest to strongest.

• Market value: $10.5 billion
• Analysts' ratings: 13 Strong Buy, 3 Buy, 2, Hold, 0 Sell, 0 Strong Sell
• Analysts' average recommendation: 1.39

Gaming and Leisure Properties (GLPI, $44.30) is the lone real estate investment trust (REIT) represented among the best Nasdaq stocks. And it's a favorite in the casino real estate industry thanks to both a snazzy dividend yield and attractive growth prospects coming out of the pandemic.

The company, whose properties include the Belle of Baton Rouge and Argosy Casino Riverside in Missouri, collected 100% of its rents in 2020, says UBS Global Research analyst Robin Farley, who is one of just two analysts with a Hold-equivalent rating on Gaming and Leisure Properties.

Stifel's Simon Yarmak is among the more crowded GLPI bull camp, citing "an attractive portfolio of regional assets, which has returned to strong operating performance."

Perhaps most optimistic of all is Raymond James analyst RJ Milligan, whose Strong Buy call and $52 price target (17% upside) is based partly on the stock "trading at an unwarranted discount."

"With zero exposure to the Las Vegas Strip, GLPI's assets have seen a stronger recovery than the other gaming REITs," Milligan says in a client note.

Lastly, Mizuho Securities initiated coverage of Gaming and Leisure Properties at Buy in late March, citing its unique attributes in an industry set to benefit from a recovery in consumer spending and gaming revenue.

"GLPI is the most diversified of the three Gaming REITs, with strong underlying tenant credit and structural lease enhancements, resulting in a lower-risk platform that we believe is under-appreciated by the market," writes Mizuho analyst Haendel St. Juste.

An added bonus for income investors: GLPI's dividend yield of 5.9% towers over that of the Nasdaq Composite, which offers a comparatively puny 0.5%.

• Market value: $1.8 trillion
• Analysts' ratings: 25 Strong Buy, 10 Buy, 2, Hold, 0 Sell, 0 Strong Sell
• Analysts' average recommendation: 1.38

Microsoft (MSFT, $239.00) might be second only to Apple when it comes to market value, but it beats the iPhone maker handily when it comes to analysts' ardor.

What gives MSFT the edge over Apple (Buy) when it comes to the Street's sentiment is its overwhelming success in cloud services.

Wedbush analyst Daniel Ives says Microsoft's most recent quarterly results were "another cloud masterpiece as MSFT is continuing to see massive cloud momentum that is still in the early days of playing out." Ives rates shares at Outperform (equivalent of Buy).

CFRA Research analyst John Freeman (Strong Buy) adds that investors shouldn't lose sight of the company's other growth areas. For example, the launch of the Xbox Series X gaming console drove 51% year-over-year growth in Xbox content and services revenue in the final calendar quarter of 2020.

However, the bottom line is that MSFT's bottom line remains keyed to the cloud.

"Microsoft has refocused the company around Azure and Office 365, which we view as several large, multi-year secular growth engines," writes Stifel analyst Brad Reback (Buy).

And let's not forget MSFT's suitability for income investors. This component of the Dow Jones Industrial Average offers a modest dividend yield of 0.9%, but it has been improving its payout at a robust clip of nearly 9% compounded annually over the past five years.

On the downside, few Nasdaq stocks look cheap these days, and MSFT is no exception. Shares trade at almost 30 times 2022 estimated earnings, per S&P Global Market Intelligence. That might be a bit rich given analysts' average annual EPS growth forecast of 15.6% over the next three to five years.

• Market value: $13.7 billion
• Analysts' ratings: 13 Strong Buy, 5 Buy, 1, Hold, 0 Sell, 0 Strong Sell
• Analysts' average recommendation: 1.37

Shares in Wix.com (WIX, $239.68) tumbled sharply following its May 11 earnings report despite posting a narrower-than-expected loss, as investors were rattled by some mixed full-year guidance.

But the market's reaction didn't push analysts away from their bullish outlook on the stock. Wix.com, which operates a cloud-based platform that enables users to create websites with integrated payments and other applications, is simply too well-positioned for the post-pandemic era, they say.

"We see heightened business investment in online presence post the pandemic as likely to persist for multiple years as consumer habits continue to shift online, and believe this is further supported by continued strength in new business creation, which we believe will have increasingly greater focus on online presence and ecommerce," writes Wedbush analyst Ygal Arounian (Outperform).

Keybanc analysts, for their part, maintained their Overweight (Buy) rating on WIX following its first-quarter earnings release.

As part of the company's focus on new business creation, Wix in early March announced the acquisition of SpeedETab, an ordering and payment technology provider for restaurants. Terms of the deal were not disclosed.

"The SpeedETab acquisition was a logical addition to the company's expanding presence in commerce (both online and offline) and specifically restaurants," writes William Blair analyst Matthew Pfau (Outperform). "The improvement to its Wix Restaurants solution appears timely considering the likelihood of reopenings over the coming months as we approach the end of the pandemic."

The post-earnings rout leaves shares with high implied upside. Indeed, analysts' average target of $352.11 gives WIX implied upside of 47% over the next 12 months or so, easily putting it among the best Nasdaq stocks in the pros' eyes.

• Market value: $2.1 billion
• Analysts' ratings: 11 Strong Buy, 2 Buy, 0, Hold, 1 Sell, 0 Strong Sell
• Analysts' average recommendation: 1.36

Analysts are amped that Axsome Therapeutics (AXSM, $57.01), a small-cap biotechnology company, looks about set to hit the market with a promising new drug.

Axsome's product pipeline includes therapies in various stages of development to treat migraine, Alzheimer's disease agitation and narcolepsy, among other illnesses. But it's the company's progress with a treatment for major depressive disorder that has the Street in love with this stock.

The Food and Drug Administration in April accepted the company's new drug application for AXS-05 with priority review. Analysts are optimistic that the highly promising therapy could be given the green light for sale and marketing before too long.

"We remain bullish on the potential for AXS-05 to be a disruptive option in a massive market with a significant unmet need," writes William Blair analyst Myles Minter. "We reiterate our Outperform rating on Axsome with the potential for the company to transition to a commercial entity by year end."

Not everyone is quite so optimistic, however. Bank of America Global Securities rates shares at Underperform (the Street's lone Sell call), saying AXSM's second-half introductions of drugs for depression and migraine are likely to disappoint.

"Both launch opportunities are in markets where AXSM's drugs are undifferentiated vs. other branded drugs," writes BofA analyst Ashwani Verma. "Moreover, competitors have dedicated significant resources on commercialization."

Even with that dissent, the Street's average target price of $143.43 gives the stock implied upside of more than 150% in the next 12 months or so, which makes it the best Nasdaq stock on this list in that respect.

• Market value: $4.0 billion
• Analysts' ratings: 11 Strong Buy, 3 Buy, 1, Hold, 0 Sell, 0 Strong Sell
• Analysts' average recommendation: 1.33

Energy stocks aren't well-represented among the best Nasdaq stocks, even though they're some of Wall Street's favorite recovery plays. And few of them boast a higher rating from analysts than PDC Energy (PDCE, $40.27).

Analysts like the independent oil & gas exploration and production company's base of assets. Moreover, they love its ability to punch well above its weight in generating levered free cash flow (FCF) – the cash left over after capital investments, dividend payments and payments to creditors.

"In our view, PDCE offers investors a compelling asset mix between the Delaware Basin and Niobrara Shale in the DJ Basin with a resilient asset base and a top-tier balance sheet," writes Stifel analyst Michael Scialla, who rates the stock at Buy.

Goldman Sachs analyst Neil Mehta recommended that clients buy PDCE during the March pullback thanks to his expectation that the firm will produce $1.1 billion in FCF over the next two years. Note that $1.1 billion in FCF would represent about a quarter of PDCE's entire market value.

Lastly, the Street applauds the company's debt-reduction efforts and its intention to return $120 million in cash to shareholders through a stock repurchase plan and a new dividend program set to launch later this year.

As for valuation, shares still look attractive even after doubling so far in 2021. PDCE trades at just 8.2 times estimated earnings for 2022, while analysts project average annual EPS growth of 7% over the next three to five years.

The Street's average target price of $48.19 gives PDCE implied upside of roughly 20% over the next year or so.

• Market value: $111.5 billion
• Analysts' ratings: 28 Strong Buy, 8 Buy, 2, Hold, 0 Sell, 0 Strong Sell
• Analysts' average recommendation: 1.32

JD.com (JD, $71.25), the Chinese e-commerce giant, is pouring money back into building the business. However, some analysts remain on the sidelines over regulatory risk and a lack of cash being returned to shareholders.

"We expect JD to continue reinvesting its free cash flow into the business and project no dividends over our forecast period," writes CFRA Research analyst Aaron Ho. "We reiterate our Hold opinion on JD following China's recent proposal of new e-commerce antitrust law."

Ho, however, is in the minority on the Street, where the great majority of analysts are bullish on JD, thanks in part to its outsized growth prospects.

"JD operates in a large and growing market with controlled logistics and an initial first-party model that has grown into a first-party/third-party hybrid," writes Stifel analyst Scott Devitt (Buy). "The China e-commerce market exceeds $1 trillion in sales with online penetration of above 20%, and we believe JD is well-positioned to continue to participate in China consumer and retail expansion for years to come."

Indeed, thanks to that massive market opportunity, analysts expect JD to generate average annual EPS growth of 31% over the next three to five years.

Like many of the best Nasdaq stocks on this list, JD doens't necessarily look cheap. But Wall Street likes the valuation. That's because, after falling 19% for the year-to-date, JD stock trades at less than 28 times analysts' estimated earnings for 2022 – arguably quite the bargain in light of that long-term EPS growth forecast.

Analysts' average price target of $108.36 gives JD stock implied upside of more than 50% in the next 12 months or so.

• Market value: $1.5 trillion
• Analysts' ratings: 32 Strong Buy, 12 Buy, 1, Hold, 0 Sell, 0 Strong Sell
• Analysts' average recommendation: 1.31

It's no secret that the Street adores Google parent Alphabet (GOOGL, $2,200.25) and has been intensely bullish for a while. Indeed, analysts' consensus recommendation hasn't fallen below Strong Buy for well more than a year.

And, heck, what's not to like? The company, with a market value of roughly $1.5 trillion, is forecast to generate average annual EPS growth of almost 20% over the next three to five years. That's heady stuff for a company this large.

But as Argus Research points out, Alphabet's immense earnings power is a natural consequence of its basic business model.

"We see Alphabet as one of the tech industry's leaders, along with Facebook, Apple, Amazon, and Microsoft," writes Argus Research analyst Joseph Bonner (Buy). "These companies have come to dominate new developments in mobile, public cloud, and big data analytics, as well as emerging areas such as artificial intelligence and virtual/augmented reality."

As attractive as GOOGL remains for the longer term, it has been more than holding up its own end in the short term too. The stock is up about 25% for the year-to-date, vs. a gain of about 1% for the Nasdaq. Some analysts would attribute that resilience in part to shares looking like a bargain compared to many Nasdaq stocks – and even the broader market.

"We continue to favor Google as a core large-cap growth holding given the strong digital advertising backdrop, continued strength from Cloud, ongoing share repurchases (with the newly authorized $50 billion program) and a reasonable valuation," writes Canaccord Genuity analyst Maria Ripps (Buy).

With shares trading at 24 times estimated earnings for 2022, you could even say they're cheap.

GOOGL's price/earnings-to-growth (PEG) ratio – which measures how expensive a stock is relative to its growth prospects – stands at 1.2. That represents a 25% discount to the S&P 500, per Refinitiv Stock Reports Plus.

• Market value: $2.1 billion
• Analysts' ratings: 11 Strong Buy, 4 Buy, 0, Hold, 0 Sell, 0 Strong Sell
• Analysts' average recommendation: 1.27

Health Catalyst (HCAT, $48.16) provides a cloud-based data platform, analytics software and professional services for hospitals and other healthcare organizations. The idea is that a partnership with this software-as-a-service (SaaS) company can help healthcare providers improve patient outcomes.

Canaccord Genuity has HCAT as one of its top healthcare IT stocks for 2021. Shares might look pricey compared with those of its sector peers, but Canaccord says they're worth it.

"We believe a premium valuation is justified for Health Catalyst as it provides 'next generation' analytics to customers," says Canaccord (Buy). "Furthermore, we are expecting HCAT to generate revenue growth of 22% and 21% in 2021 and 2022, respectively, while its peer group is expected to generate average revenue growth of 9% in each of those years, or less than half of HCAT's estimated growth rate."

Stifel chimes in with a Buy rating of its own.

"Our thesis reflects HCAT's market leadership in the Healthcare Analytics market," writes analyst David Grossman. "We expect HCAT to maintain 20%-plus organic growth through a combination of new clients and contractual price escalators."

And at Raymond James, analyst John Ransom (Strong Buy) expects business to accelerate in the coming months as the COVID-19 crisis gradually abates.

"We continue to expect to see rising demand for the Health Catalyst suite of solutions going forward, particularly given the resurgence of both payor and provider focus on value-based care, which the company's data and analytics play directly into," Ransom says.

• Market value: $10.0 billion
• Analysts' ratings: 10 Strong Buy, 3 Buy, 0, Hold, 0 Sell, 0 Strong Sell
• Analysts' average recommendation: 1.23

It's no secret the housing market is red-hot right now, and that has analysts feeling extremely confident in the outlook for Builders FirstSource (BLDR, $46.64).

The company, which manufactures and supplies building materials, manufactured components and construction services to professional homebuilders, has built itself up through small acquisitions over the years. That's paying off now amid a nationwide shortage of new homes.

Most recently, the company acquired John's Lumber, a family-owned supplier of lumber and other building materials, to boost its presence in Michigan. John's generated almost $50 million in revenue over the past 12 months, BLDR said. Other terms of the deal were not disclosed.

It's a good time to be bulking up, analysts say, given the tremendous economic tailwinds at the company's back.

"Two macroeconomic trends are driving historical financial performance, including: 1.) significant demand for new home construction; and 2.) historically high lumber commodity prices," writes B. Riley Securities analyst Alex Rygiel (Buy).

"We anticipate new home construction activity to remain brisk for some time, however, there is increasing risk that we are nearing the peak in lumber commodity prices," Rygiel adds. "With that said, we continue to believe BLDR can deliver superior financial performance in 2021 and 2022 even at lower lumber prices, and its valuation remains attractive."

Analysts have had a consensus Strong Buy recommendation on the stock for more than nine months now, and it has been paying off. BLDR is up more than 40% over the past six months, and 17% for the year-to-date.

The Street expects BLDR to be one of the best Nasdaq stocks to buy in the year ahead. Analysts' average target price of $66.58 gives BLDR implied upside of more than 40% in the next year or so.

• Market value: $1.6 trillion
• Analysts' ratings: 36 Strong Buy, 11 Buy, 0, Hold, 0 Sell, 0 Strong Sell
• Analysts' average recommendation: 1.23

Amazon.com (AMZN, $3,151.94) lags behind only Apple and Microsoft on the list of largest U.S. companies by market value, but it's ahead of both in the pros' eyes.

Its average recommendation score of 1.23 hinges on a whopping 36 Strong Buy ratings. By comparison, AAPL gets 23 Strong Buy calls, while MSFT – as noted above – claims 25.

And is it any wonder? We're talking about a company with a market capitalization of $1.6 trillion that analysts expect to deliver average annual EPS growth of almost 35% over the next three to five years.

So much for the law of large numbers.

AMZN was a juggernaut even before COVID-19 swept the globe and upended so much of what we thought we knew about the future of e-commerce. Now, more than a year into the pandemic, it's clear the company has only grown stronger.

"Amazon is one of the primary beneficiaries of COVID given accelerated e-commerce sales growth and Prime membership adoption, as well as the digital transformation that will accelerate cloud services adoption," writes Stifel analyst Scott Devitt (Buy) in a note to clients.

Devitt also reminds clients that the pandemic sparked online purchases of grocery and consumables – categories Amazon struggled to penetrate for years – which should support its next leg of retail growth.

And let's not forget the company's leadership in cloud services. With e-commerce, cloud and an emerging high-margin marketing business, Amazon "remains well positioned in a recovery scenario given cloud services, marketing services and certain e-commerce categories/geographies are still in the early phases of development," the analyst writes.

With an average price target of $4,238.46, analysts give AMZN stock implied upside of around 35% in the next 12 months or so. With shares off about 3% so far in 2021, you can practically hear the Street shouting, "Buy the dip!"

• Market value: $2.6 billion
• Analysts' ratings: 10 Strong Buy, 2 Buy, 0, Hold, 0 Sell, 0 Strong Sell
• Analysts' average recommendation: 1.17

Rocket Pharmaceuticals (RCKT, $41.61) is another small biotech with promising drugs under development, and it currently tops this list of the best Nasdaq stocks. It's ultra-low score of 1.17 indicates a strong Strong Buy.

However, as with all such stocks in its space, caution is warranted. Names like RCKT tend to be a bit speculative, after all.

Regardless, analysts are plenty bullish on the name, which focuses on developing gene therapies for rare and devastating pediatric diseases.

The Street's Strong Buy rating remained in place even after the company recently received some less-than-great news. In early May, Rocket Pharma disclosed that the FDA put a clinical hold on trials for the development of its RP-A501 drug to treat Danon disease: a rare genetic condition characterized by weakening of the heart muscle.

"The clinical hold on RP-A501 (Danon disease) is less-than-ideal but not thesis-changing for us," writes Stifel analyst Dae Gon Ha (Buy). "Management anticipates enrollment delay of one quarter."

The bigger picture, Ha says, is that RCKT's "promising early data keeps us optimistic of future updates and the odds of regulatory approval."

At William Blair equity research, analyst Raju Prasad (Outperform) cites the company's "sound strategic approach" to the use of its platform, as well as favorable early data.

Note well that Rocket Pharma isn't forecast to be profitable until 2024. Additionally, although it has a very high-conviction average recommendation of Strong Buy, only 12 analysts cover the stock.

As we said, these sorts of stocks tend to be speculative bets, and that means they also tend to be volatile. Shares more than doubled over the past 52 weeks, and yet are also off nearly 25% for the year-to-date.

Analysts' average target price of $70.91 gives RCKT implied upside of around 70% over the next year or so. That could very well come to pass. Just make sure this name is a solid fit for your own personal risk profile before pulling the trigger.

2020 was a tough year by any measure. But if anyone looked back on last year with fondness, it likely would've been investors in the so-called FAANG stocks.

COVID-19 kicked off a stock market crash, forced much of the economy to pivot to a work-from-home model, triggered a recession and record unemployment, and set off a chain of corporate bankruptcies.

However, the various difficulties presented by the COVID-19 pandemic actually played right into the hands of the FAANGs – Facebook, Amazon.com, Apple, Netflix and Google parent Alphabet. These five stocks averaged a 58.0% total return (price plus dividends) in 2020, compared to an 18.4% return for the S&P 500, and largely helped power a 44.9% return for the Nasdaq Composite.

But we're well into 2021 now, and several clouds have begun to amass above the FAANG stocks. In addition to individual problems unique to each company, governmental regulation and taxation are a growing potential headwind to them all.

"The digital economy is growing two-and-a-half times faster than global GDP and unsurprisingly, governments want their cut," says Daniel Eye, head of asset allocation and equity research at Fort Pitt Capital Group. "'If you can't beat 'em, tax 'em,' is the mantra being adopted by many foreign politicians. Governments across Europe, Asia and Canada are either enacting or proposing digital services taxes on U.S. technology companies."

Read on as we look at some of the latest challenges facing the FAANG stocks, as well as what (if anything) each is doing about it. Most analysts remain largely bullish on each of these stocks despite these issues; still, investors are typically served well by fully understanding any headwinds that their holdings face.

Data is as of April 4.

• Market value: $848.8 billion
• 2020 total return: 33.1%

Facebook (FB, $298.66) is like many of the FAANG stocks in that it has been in the crosshairs of U.S. regulators for years.

Primarily, Facebook been the focus of investigations over privacy and what the company does with its users' data. In fact, it started off 2021 by agreeing to pay $650 million to settle a 2015 lawsuit over the alleged unauthorized creation of images gathered from its facial recognition technology.

Much more recently, the personal data of more than 500 million Facebook users was posted online. This information, gained in a 2019 hack, previously was made available to hackers, but the new posting makes it much easier to use.

The specter of antitrust actions always looms over Facebook's head, too. Sen. Elizabeth Warren's campaign included vows to break up big tech, with Facebook (and its Instagram and WhatsApp subsidiaries) among the top targets. Warren lost her presidential bid, of course, but her party won the White House and controls both chambers of Congress. This issue won't disappear anytime soon.

"Facebook always seems to face regulatory risk, and with the recent political regime change, those risks could be elevated in 2021; especially if those regulations limit the application and collection of user and usage data," says Chris Osmond, CFP, CIO at Prime Capital Investment Advisors. "Additionally, should stricter antitrust rules emerge, Facebook could experience acquisition restrictions. Facebook's user data utilization falls under even more scrutiny."

If that's not enough to make Facebook investors a little tense, there's also the continuing problem of millennials and younger users abandoning the platform for "cooler" social media hangouts like TikTok. Then there's the move by Apple to restrict access to user data on iOS – a move that will hit Facebook ad revenue on the platform.

Facebook is playing a fierce game of problem whack-a-mole in response.

Late last year, the company launched Instagram Reels, a short video sharing feature designed to compete against TikTok. It also took out full-page ads and launched a website decrying Apple's latest actions.

However, FB's primary strategy in terms of regulatory challenges has been to play defense. CEO Mark Zuckerberg has made appearances before various committees to defend the company's actions. He also has made frequent announcements about changes to Facebook services in reaction to events – for instance, earlier this year, Facebook stopped recommending political groups in users' News Feeds.

• Market value: $1.6 trillion
• 2020 total return: 76.3%

The pandemic was a disaster for many companies, but some seemed purposefully designed to thrive in the conditions. Largely speaking, and even among the FAANG stocks, few were in a better position to profit from it than Amazon.com (AMZN, $3,161.00).

Stores shut down and people in lockdown? No problem. Amazon was there to pick up the slack with a massive online shopping presence, backed by an extensive distribution and delivery network. Business was up so much that Amazon went on one of the country's biggest hiring sprees. With bored consumers turning to streaming video and online gaming for entertainment and remote workers using Zoom (ZOOM) and other video chat for meetings, Amazon Web Services (AWS) – the world's largest cloud computing provider – was there to provide the extra bandwidth.

But it'll be difficult for AMZN to repeat its monster 2020 return.

There's the question of what happens to Amazon's e-commerce sales as the vaccine rollout continues and people begin to visit more brick-and-mortar locations. Prime Capital's Chris Osmond acknowledges this might have an impact on Amazon's sales, but sees it as a short-term concern:

"It's not unfathomable to envision consumers wanting to flock back to brick-and-mortar retail stores once restrictions are lifted," he says. "However, that could very well be more of a transitory trend; only placing relatively short-term pressure on AMZN."

But Amazon also continues to face antitrust investigations in the European Union, where AMZN is accused of unfairly competing against third-party marketplace sellers on its platform. It also faced a domestic antitrust investigation centered around its AWS platform in 2019. (Amazon Web Services generates the lion's share of Amazon's operating profit, so anything threatening this service is worth watching.)

Amazon's response to antitrust challenges has primarily been to deny and defend against accusations. But soon, it will be doing so with a new voice. Company founder and CEO Jeff Bezos will step down in the third quarter, with longtime AWS leader Andy Jassy taking over as CEO.

• Market value: $2.1 trillion
• 2020 total return: 82.3%

Apple (AAPL, $123.00) took the crown among FAANG stocks in 2020 with an impressive 82%-plus total return.

It too faces a few hills in 2021.

We'll start with Apple's fight against Epic Games over Apple's cut of Fortnite revenue, which led to Apple blocking the popular game and any updates to installed iOS versions through the App Store in 2020. A court battle with Epic over App Store fees is expected to go to trial in May. A potential Department of Justice probe also looms. A loss here could have far-reaching consequences for Apple's lucrative App Store revenue.

The DoJ also is investigating the company's "Sign in With Apple" button on iOS and macOS. Specifically, it's looking into concerns that this button discriminates against other phone makers.

Apple also continues to face lawsuits from consumer associations in several European countries over the "planned obsolescence" issue that saw the company throttle performance on older iPhones. And as mentioned before, Facebook is going after Apple for planned changes to iOS that would make it more difficult to track users across apps.

What has the company been doing to defend against these threats?

In November, Apple tried to reduce the App Store pressure by announcing it would halve its cut for apps and services with less than $1 million in sales to 15%. Apple also is doubling down on privacy, making it a key selling point of iOS 14, which will be released in the fall. Indeed, Apple CEO Tim Cook has been on the offensive, trash-talking Facebook's business model. Speaking at a January conference, Cook didn't name Facebook specifically, but his target was clear:

"If a business is built on misleading users, on data exploitation, on choices that are no choices at all, it does not deserve our praise. It deserves reform."

While you can expect Apple's legal team to be spending a lot of time in the courts – in both the U.S. and Europe – in 2021, not all of Apple's issues are legal in nature.

One that particularly stands out is the FAANG stock's foray into streaming with Apple TV+, which has so far failed to get the subscriber count Apple was hoping for.

In January, Apple announced that free trials of Apple TV+ would be extended until July 2021 and paying customers would be credited for their payment from February through July. The company is hoping the free access and a continued investment in original content will eventually get users hooked and convince them to start paying.

Want to learn more about what will drive Apple stock in 2021? Be sure to check out our feature.

• Market value: $238.9 billion
• 2020 total return: 67.1%

Like Amazon, Netflix (NFLX, $539.42) found itself to have a perfect business model for a pandemic. A demand for at-home entertainment resulted in an unexpected subscriber boost; in the first six months of 2020, that amounted to an additional 25 million new subscribers.

However, Netflix finds itself in challenging times.

After the stellar start to 2020, subscriber additions fell to four-year lows in Q3 2020. During the fourth quarter, Netflix added 8.5 million subscribers – better than analysts expected, but a 3% decline in additions from the year-ago quarter.

Pandemic lockdowns easing will be problematic, but more so just given the glut of competition that has entered the fray over the past couple years. Name a media company, and it probably has its own video streaming service now. The most notable addition of late was Walt Disney's (DIS) November 2019 launch of Disney+. At the time, Disney aimed to reach 60 million to 90 million subscribers by 2024. Several weeks ago, the company announced that Disney+ was already at 94.9 million.

The dramatic increase in competition means media companies like Disney have been pulling content from Netflix to become exclusives on their own services. Chris Osmond points out the dual effect of the fading pandemic and increased competition.

"In an attempt to retain and capture new subscribers, NFLX is spending billions of dollars on original content creation," he says. "Unknown is the impact on NFLX earnings in 2021, particularly in the second half of the year when the strict COVID mandates are expected to ease.

"So much is unknown surrounding consumer behavior once restrictions are lifted, and should consumers spend their time and dollars outside of the home, NFLX could experience shrinking margins. With the global rollout of Disney+ and launches of Peacock and HBO Max, NFLX also faces significant increased competition for subscriber dollars."

Netflix also faces tax issues abroad, says Pitt Capital's Daniel Eye. For example, the government of Canada is expected to begin charging either the Goods and Services Tax (GST, 5%) or Harmonized Sales Tax (HST, 13% to 15%) for Netflix. Either way, this means additional cost to Netflix (even if it collects the tax from customers instead of absorbing it).

Here, NFLX doesn't have many other answers other than raising prices (which it did in December) and continuing to spend big on original content.

• Market value: $1.4 trillion
• 2020 total return: 31.0%

Finally, it's time to look at Google parent Alphabet (GOOGL, $2,129.78). Of the FAANG stocks, Google delivered the smallest return in 2020.

But it has had the most success in 2021, up 22% versus single-digit gains and even losses for the rest of the FAANGs.

Alphabet has had a few technological challenges of late. For instance, while its Pixel smartphones quickly gained a reputation for their high-quality cameras shortly after 2016 launch, the phones have failed to sell in any great number, and competitors like Apple's iPhone have closed the camera app. Google switched from flagship to mid-range models, and now Pixel smartphones receive more red marks for their quality and lack of horsepower.

The Pixel 6 is expected this October. What's not known is whether Google will go even further downmarket and cut prices in an attempt to sell more units, or go back to trying to out-innovate Apple.

And while the company's streaming game service, Stadia, should have had a shining moment in 2020, it didn't. Stadia, which launched in November 2019, promised a high-end PC gaming experience on virtually any connected device, with Google's servers doing all the heavy processing. And yet 15 months later, on Feb. 1, Google announced it was shutting down its in-house Stadia game development studio, casting doubt on its commitment to Stadia and the game streaming service's future. Now, 2021 is shaping up to be a make-or-break year for the service.

But without a doubt, Google's single largest hurdle to overcome in 2021 will be ongoing antitrust investigations around its dominance of internet search.

In 2019, Google's use of search to promote paid advertising earned it $9.2 billion in fines from the EU for violating antitrust regulations. Similar investigations have been ongoing in Google's home territory. In the latest development, a bipartisan group of 38 state attorneys-general launched an antitrust suit in December. This was the third such suit filed against Google in a year.

The company's response has been blog posts defending its operation, aimed at consumers. In response to the December suit, Google's director of public policy wrote:

"To get more specifically to the issues raised in today's lawsuit: it suggests we shouldn't have worked to make Search better and that we should, in fact, be less useful to you."

Ultimately, the courts will decide Google's fate. Expect Google's legal team to be busy in 2021.

Income investors may be forgiven if they're still shell shocked a year after they suffered a tsunami of dividend cuts, suspensions and cancellations the likes of which the market has rarely seen.

In 2020, investors could hardly keep up with the daily drumbeat of bad dividend news. Even immense blue-chips like Walt Disney (DIS), a stalwart dividend payer and component of the Dow Jones Industrial Average, were turning off the spigots that return cash to shareholders. Heck, Disney's dividend remains suspended to this day.

Happily, the flood of dividend cuts and cancellations we saw last year has slowed to barely a trickle in 2021. But that doesn't mean the wider stock market has been totally kind to income investors' wallets. A look beyond the S&P 500 reveals that we're not completely safe from bad news as far as dividend cuts are concerned.

Perhaps just as important, although some companies have since reinstated their dividends after suspending them for a time, the reinstated payouts are far less than what income investors had come to expect.

To get a sense of where income investors remain at peril, we screened the Russell 3000 for key recent dividend cuts, suspensions and cancellations. Have a look at the three most notable dividend decreases of the past three months.

Share prices and other data are as of June 30, unless otherwise noted. Dividend yields are calculated by annualizing the most recent payment and dividing by the share price.

• Market value: $205.5 billion
• Action: Dividend decrease
• Annual dividend prior to change: $2.08 per share*

Big changes are coming to AT&T (T, $28.78) in 2022.

On May 17, the telecom giant announced that it was spinning off WarnerMedia – which it acquired in June 2018 for $85 billion – and merging it with Discovery Communications (DISCA), the company behind cable networks such as HGTV, Animal Planet, and the Food Network.

Together with HBO, CNN, TBS, the Warner Bros. movie studio and other media properties, the combined entity will have the scale necessary to compete with Netflix (NFLX), Disney (DIS) and the rest of the entertainment industry's behemoths.

AT&T will receive $43 billion in cash, debt securities and the assumption of some of WarnerMedia's debt by Warner Bros. Discovery, the new name of the combined entity. AT&T and its shareholders will own 71% of Warner Bros. Discovery.

However, dividend investors won't be getting the same payout they've become accustomed to once the combination is completed in mid-2022.

According to AT&T CFO Pascal Desroches' June 15 update to shareholders, the company will pay out between $8 billion to $9 billion annually for dividends. That's approximately 40-43% of the $20 billion or more in free cash flow it expects to generate once WarnerMedia's been spun off.

In the first quarter ended March 31, AT&T paid out $3.83 billion in dividends. That's $15.32 billion on an annualized basis. Based on the midpoint of the company's dividend payout guidance post-closing, AT&T will reduce its dividend by 45% to an estimated $1.19 per share.

The cut won't take place until the transaction is completed. The good news is that it plans to invest the savings in 5G and its fiber network, increasing its annual capital investment to $24 billion.

Analysts are mixed about the move.

"Everybody recognizes that [AT&T] is a lumbering old giant with slower growth prospects and a lot of debt. So, I think they've done this transaction in an attempt to change the perception of the company to something with some more growth characteristics," Baskin Wealth Management president David Baskin told the Cantech Letter in early June.

* The cut has not occurred yet. This is based on an AT&T projection.

• Market value: $5.0 billion
• Action: Dividend decrease
• Annual dividend prior to change: $1.23 per share

Antero Midstream (AM, $10.39) gave investors a jolt in mid-February when it slashed its dividend 27% in order to allocate more capital to infrastructure investments.

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The operator of pipelines and storage facilities for natural gas, liquid natural gas, and water handling and treatment, slashed its annual payout to 90 cents a share from $1.23 a share.

The move allows AM to boost capital expenditures by about $65 million, notes Raymond James analyst J.R. Weston, who rates the stock at Market Perform (the equivalent of Hold).

"While we've previously cautioned of the AM financial model attempting to 'thread the needle,' and the stock has persistently traded with a double digit dividend yield, we still expect the dividend cut will surprise some investors," Weston said in a note to clients.

UBS analyst Shneur Gershuni, who rates the stock at Neutral (Hold), largely agrees with Weston's take on events.

"While AM's headline dividend cut supports future near term volume growth, lowers leverage and creates a fresh cash flow entity, the optics of cutting to raise capex was not well received by investors," Gershuni writes.

Shares in Antero Midstream plunged more than 12% after the Feb. 18 disclosure, which is typical after stocks announce dividend cuts. However, it managed to reclaim the lost ground in a matter of weeks. And even after a bout of recent weakness, AM is up more than 35% for the year-to-date through the end of June, beating the S&P 500 by more than 20 percentage points.

At 90 cents per share annually, AM's dividend yield based on the June 30 closing stock price comes to 8.7%.

Analysts' consensus recommendation on AM stock stands at Hold, according to data from S&P Global Market Intelligence. Their average annual earnings growth forecast stands at 3% over the next three to five years.

• Market value: $17.9 billion
• Action: Dividend decrease
• Annual dividend prior to change: $1.48 per share

Healthpeak Properties (PEAK, $33.29), a real estate investment trust (REIT) that invests in life sciences, medical offices and senior housing properties, cut its dividend in February by 19%.

The most recent quarterly dividend of 30 cents per share – down from a previous payout of 37 cents a share – will result in annual dividend savings of about $150 million. At a projected $1.20 a share annually, PEAK's dividend yield comes to 3.6% as of the end of June.

Analysts applaud the REIT's efforts to transform its portfolio by selling its more than $4 billion senior housing portfolio, but note that the asset sales are also a drag on near-term earnings.

Indeed, by one measure, PEAK would appear to have ample resources backing its dividend. After all, the company spent a total of $787.1 million on dividends in 2020 – up from $720.1 million the previous year – and still had $1.6 billion in free cash flow after paying interest on debt.

However, net income in 2020 came to just $413.6 million. When the bottom line has to catch up to the dividend amid a costly repositioning of the business, PEAK's financial prudence is understandable.

Besides, analysts say that reducing exposure to senior housing facilities is a critical strategic move.

"In the wake of the sharp increase in COVID cases in late 2020 into January 2021, we lower our outlook for senior housing given weaker occupancy trends and higher operating expenses," says Mizuho Securities analyst Omotayo Okusanya, who rates PEAL at Neutral (Hold). "Transforming its portfolio to majority life sciences and medical office buildings could result in positive re-rating from the investor community."

Analysts' average recommendation on PEAK comes to Buy. They forecast the company to deliver average annual earnings growth of 3.9% over the next three to five years, according to S&P Global Market Intelligence.

• Market value: $409.8 million
• Action: Dividend decrease
• Annual dividend prior to change: 24 cents per share

National CineMedia (NCMI, $5.07) isn't a movie chain, but it has been hammered by the pandemic in just the same way. The company displays advertising to movie-goers throughout the U.S., and with cinema attendance only just starting to trickle back after a long pandemic drought, revenue has been hurting.

NCMI reduced its quarterly payout to 5 cents a share from 7 cents a share as part of its fourth-quarter earnings release in early March, but analysts say investors shouldn't be alarmed by the move.

Wedbush's Michael Pachter, who rates NCMI at Neutral, says payout reduction was "out of an abundance of caution," as the company has more than enough cash available for dividends, income tax payments, and other fees.

Furthermore, the analyst is cautiously optimistic about the course of its business as theater chains gradually normalize operations.

"We think NCM will be well-positioned within the ad delivery ecosystem once attendance rebounds, but currently low theatrical attendance severely limits NCM’s ability to sell impressions even as advertisers are ready," writes Pachter in a note to clients. "As theatres reopen and the release slate schedule becomes more clear, we view NCM's position as increasingly positive."

At 5 cents a share per quarter, or 20 cents per share annually, the yield on NCMI's dividend came to 3.9% as of the end of June. Analysts' consensus recommendation stands at Hold, according to S&P Global Market Intelligence.

Why would you hunt down the best stocks to buy now for a downturn when the markets are at all-time highs?

The current bull market – currently fueled by cheap money from the Federal Reserve, another stimulus plan and, most importantly, the hopes that some day in the nebulous future, we'll have COVID under control – is going to end. Every bull market does.

That's not why, however. That end, which would occur with a 20% decline from a market peak, could be a long time coming. The reason why is that even a mere correction, which is a decline of between 10% to 20%, would be enough to rack up sizable losses and shake investor confidence. And several market watchers see the potential for a correction in the coming months.

"Overall, we still believe U.S. equities in general remain vulnerable to a bigger correction than we have experienced thus far- and that this could materialize in Q1 or Q2 with upwards of a -10-15% repricing off the recent highs," says Dan Wantrobski, technical strategist at Janney Montgomery Scott.

"The message from market sentiment and positioning indicators is that equities are ripe for a correction," adds BCA Research.

Naturally, it's better to have an escape plan before you need it. So if at some point the "hopium" disappears, you'll want to be exposed to more defensive stocks – companies that sell vital goods and services, have reliable earnings and, where possible, pay dividends. Almost everything is overvalued now, but these kinds of stocks should hold their value better in a downturn than the rest of the market.

Read on as we discuss 11 of the best stocks to buy now if you want to add some protection against future turbulence. Three specific areas of the market stand out right now: digital infrastructure stocks, healthcare providers and consumer staples stocks – all areas of the market that will be in demand no matter what happens over the next few months.

Data is as of Feb. 4. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.

• Market value: $206.2 billion
• Dividend yield: 7.2%
• Industry: Telecommunications

AT&T (T, $28.89) admittedly made some of the worst business mistakes of the last decade, buying both DirecTV and Time Warner. The idea was to get more from its Internet services by adding content to them, but so far, that hasn't worked out quite as planned.

Veteran AT&T executive John Stankey became CEO in July 2020. He replaced Randall Stephenson, who made those bad decisions. His first move was to consolidate the company's entertainment assets around HBO Max, a streaming service that competes with Netflix (NFLX). This meant, among other things, releasing theatrical movies online at the same time they go into theaters.car It's a risk – more people might sign up for HBO Max in the short-term, but top producers, directors and stars might be less willing to sign with AT&T's Warner studio longer-term.

The good news? Demand for 5G wireless service should bail out AT&T to some extent and help it maintain its phenomenal dividend – a hallmark of many defensive stocks.

AT&T currently boasts the fastest 5G network and was a major bidder in the recent auction of new spectrum. This could mean even more debt – AT&T reportedly was seeking another $14 billion in debt on top of the $179 billion in IOUs it carried at the end of 2020, according to S&P Global Market Intelligence data. Still, 5G is essential to the Machine Internet, thus essential to economic growth, and thus essential to AT&T's growth.

Marc Lichtenfeld, chief income strategist at The Oxford Club, insists AT&T has enough cash flow to not only afford its dividend, but keep increasing it and maintain its status among the Dividend Aristocrats. AT&T's high payout is among the top reasons to consider T among the best stocks to buy now for a smoother ride in a downturn.

"Its entertainment business should rebound as the economy recovers and HBO Max is off to a strong start," Lichtenfeld adds.

Sam Hendel, president of Levin Easterly Partners, a New York-based asset manager, says the wireless business was very stable during the pandemic and will continue to generate cash. He also expects Warner Media to recover as the pandemic eases. "The stock at 8 times free cash flow has limited downside," he says.

Robert R. Johnson, a professor of finance at Creighton University's Heider College of Business, adds that AT&T is "attractively priced" at less than 10 times next year's earnings.

• Market value: $228.6 billion
• Dividend yield: 4.6%
• Industry: Telecommunications

Verizon (VZ, $55.14) didn't spend as heavily on content assets as AT&T over the past decade, and thus, its stock wasn't hit as hard by their failure to perform. Most of the value in the former America Online and Yahoo, combined as Verizon Media, was written off in late 2018.

What's left is a purer play in telecommunications than AT&T, with wireless and its FiOS cable unit at its center. Like AT&T, Verizon was a big bidder during the recent frequency auction. Its debt load is a little lighter, too, at $150 billion. VZ has focused on network management and has cut its costs by $10 billion per year, using technology and buying out some executives' contracts.

Jeff Bilsky, co-portfolio manager at Chartwell Investment Partners in Berwyn, Pennsylvania, calls Verizon's wireless services a staple of modern life. "Verizon should be one of the biggest beneficiaries of the 5G craze, he says. "As customers consume more data, both revenue and margins should improve."

"Verizon's laser focus on going all-in on 5G positions it as a strong investment opportunity with a strong yield," says Daniel Milan, managing partner of Cornerstone Financial Services in Southfield, Michigan. He is very bullish on 5G, which uses spectrum from the low frequencies of broadcasters to the highest ones of satellites. "Not making big bets on media has allowed Verizon to invest billions in the network."

Yale Bock, founder of YH&C Investments in Las Vegas, agrees that "consumers will keep paying" for wireless service, giving Verizon a sound revenue base. That stability makes VZ one of the best stocks to buy now to take a defensive stance.

• Market value: $159.0 billion
• Dividend yield: N/A
• Industry: Telecommunications

T-Mobile US (TMUS, $130.60) completed its acquisition of Sprint in April 2020. The all-stock transaction put the merged entity in good position entering the recent auction of new 5G spectrum, as it already has most of what it needs on that front.

T-Mobile is now busy buying equipment to build out its assets, and has already signed to spend $2.1 billion advertising 5G service through Initiative, part of Interpublic Group (IPG).

In May 2020, Mike Sievert replaced CEO John Legere, whose long hair and T-shirts defined the company's advertising for nearly a decade. Sievert has spent most of his career in marketing, including a stint at AT&T. He was hired as chief marketing officer by Legere in 2012.

Chartwell's Bilsky says that despite past outperformance relative to its rivals, T-Mobile still might have the best upside, even in a downturn. "T-Mobile now has the potential to steal significant market share," he says, and investors might be underestimating that.

Ryan Johnson, director of Portfolio Management & Research at Buckingham Advisors, a wealth advisor in Dayton, Ohio, believes T-Mobile has an edge in 5G that could last a year or more. He also thinks there are more cost savings to come from the Sprint merger.

"Earnings per share may triple from 2021 to 2024," he adds.

• Market value: $100.8 billion
• Dividend yield: 0.4%
• Industry: Industrial conglomerate

General Electric (GE, $11.45) is one of the "fallen angels" of the last decade. The mistakes made by former CEO Jeff Immelt, like buying Alstom's energy business in 2015, and hiding the damage from shareholders, are now legend.

Saving the company from bankruptcy was a close-run thing. But Larry Culp – recruited from the Harvard Business School after building Danaher (DHR) into a medical equipment conglomerate now worth more than GE – seems to have done it.

"CEO Lawrence Culp, who took over in October 2018, has long been known for his focus on cash," says Argus Research's John Eade, who has a Buy rating on GE and calls it a deep value idea. "His previous company, Danaher, has a multidecade history of generating more free cash flow than net income, and we have expected him to focus on this metric at GE.

"The company achieved more than $2 billion in operational cost reductions and $3 billion of cash preservation to mitigate the financial impact of the pandemic."

GE's biggest business is in turbines. This includes power turbines that create power from natural gas and wind turbines that create electricity from moving air, as well as jet engines that power jet planes. The usually reliable jet engine business has been hurt by the pandemic and the Boeing (BA) 737-MAX scandal. The power turbine market has also been weak during the pandemic.

But there's another big business at GE – one that Culp is familiar with from his time at Danaher. Healthcare is an "exceptional" business, says YH&C Investments' Bock. Since selling GE Healthcare's biopharma unit to Danaher to help the balance sheet, GE has become a buyer of other companies again. Its first acquisition is Prismatic Sensors, a Swedish company whose photon-counting technology can directly benefit GE Healthcare's CT scanners.

Now that General Electric has right-sized itself, its blend of businesses actually make GE more of a defensive play again, putting it among the best stocks to buy now to add ballast to a portfolio.

• Market value: $35.4 billion
• Dividend yield: N/A
• Industry: Healthcare plans

Centene (CNC, $60.40) earns its money managing Medicare and Medicaid contracts. It does this through managed care, in which it controls spending through contracts with front-line clinics, as well as acute care facilities such as dialysis centers, and by controlling drug disbursement.

The model proved very popular on the Healthcare.gov exchanges created under the Affordable Care Act, as the company could offer lower prices than traditional insurers.

Centene has already made an M&A move in this young year, agreeing to buy Magellan Health (MGLN) for $2.2 billion. Deutsche Bank analyst George Hill praises the Magellan buy, which focuses on specialties new to Centene, such as mental health. It also brings in 5.5 million new government patients, 18 million specialty health customers, and 16 million medical pharmacy members.

"Centene will double the lives covered in mental health and establish one of the largest behavioral health platforms in the U.S., with 41 million unique members," Hill says.

Centene trades at just 11 times earnings estimates. Part of that is because margins are thin, though, with just 2% of revenues hitting the bottom line. That means growth has to come from acquisitions, from low bids on the exchanges, or from new government health contracts.

"The more challenging the economy and the fewer people who have medical coverage from employers, the greater potential there is for them to seek Medicaid coverage," says Sam Hendel, president of Levin Easterly Partners in New York. He adds that Centene is a defensive stock "with a low correlation to economic or stock market weakness."

The analyst community also throws its weight behind CNC shares. Thirteen of 17 pros covering Centene put it among their best stocks to buy now, with an average $82.15 price target that implies 36% upside from current prices.

• Market value: $96.1 billion
• Dividend yield: 2.7%
• Industry: Pharmacy, healthcare plans

CVS Health (CVS, $73.00) isn't just a pharmacy chain. Instead, it's more of a total healthcare system, also offering doctor's visits, managed care through Aetna, and a pharmacy benefit management system that gives it control over drug costs.

The Aetna acquisition, in 2018, boosted revenues by $60 billion annually year. Like Centene, it's built for hard times.

In November, analysts at CFRA Research in New York reiterated their strong buy rating on the stock. Analyst Kevin Huang wrote that he didn't expect Amazon.com's (AMZN) PillPack offering to damage CVS. And there's reason to believe that Amazon won't necessarily cripple the competition in every business it touches. The company already decided earlier this year to shutter its Haven Healthcare – a joint-venture effort at managed care with Berkshire Hathaway (BRK.B) and JPMorgan Chase (JPM). The decision emphasized the size of CVS' moat in pharmacy and managed care.

YH&C Investments' Bock holds CVS in some client portfolios because of its size, consistent cash flow and profitability. The analyst community is also strongly bullish on the pharmacy chain, giving it 21 Strong Buys or Buys against six Holds and no Sells of any kind. In addition to its attractiveness as a defensive stock, they believe CVS has about 18% upside in it over the next 12 months.

• Market value: $314.5 billion
• Dividend yield: 1.5%
• Industry: Healthcare plans

You might be noticing a trend: Health insurers make for pretty defensive stocks. No wonder, then, why we're also including UnitedHealth Group (UNH, $329.32). UNH is America's largest health insurer, and one of its most profitable, squeezing out a roughly 6% net margin on its $257.1 billion in 2020 revenues.

UnitedHealth dominated the past decade thanks in part to the technology platform built by its Optum unit. Its decision to buy Catamaran, a pharmacy benefit manager, in 2015 gave it greater control over drug costs.

Buckingham Advisors' Ryan Johnson believes UNH would weather a market downturn thanks in part to the growth of Optum, which delivers half its operating income.

"These businesses are focused on lowering costs, which is attractive in any environment," he writes.

UnitedHealth also has more than 8 million customers outside the U.S., mostly in Asia and South America, providing a little geographic diversification. And UNH's strong free cash flow and low debt, relative to its market value, should allow it to continue making acquisitions as it spies opportunities to grow.

CFRA's Sel Hardy believes UNH is among some of the best healthcare stocks to buy now, rating it a Strong Buy in part on optimism for the recent $13 billion acquisition of health-tech firm Change Healthcare.

"We cut our '21 EPS (Dec.) estimate by $0.20 to $18.65 as we trim our Q1 EPS estimate due to rising medical costs trend," Hardy says. "Following the closure of Change Healthcare transaction in H2 2021, we might revise our estimates up."

UNH isn't a big yielder, at just 1.5%, but its $1.25-per-share quarterly payout is 150% larger than it was five years ago. If UnitedHealth continues to upgrade its dividend at a brisk rate, current shareholders should enjoy a much better yield on cost over time.

• Market value: $35.0 billion
• Dividend yield: 3.6%
• Industry: Packaged foods

General Mills (GIS, $56.90) is as essential to the history of Minneapolis as Coca-Cola (KO) is to Atlanta, or Procter & Gamble (PG) is to Cincinnati. It's also an important holding for defensive investors.

General Mills' brands include Cheerios cereal, Yoplait yogurt, Pillsbury dough, and Häagen-Dazs ice cream, as well as Green Giant frozen vegetables, Totino's pizza, Progresso soup and Annie's organics. While the stock itself has effectively gone nowhere over the past five years, it trades for a reasonable 15 times earnings, yields more than 3%, and most importantly, has been extremely resilient during numerous market downturns.

"The company is now in a fundamentally better place than it was prior to 2020," write Credit Suisse analysts, who rate the stock at Outperform. The big risk to margins remains inflation, which management thinks it can hold down to 3%, hedging most of its exposure to rising commodity prices. Productivity also has increased by more than 4%, and GIS has been able raise list prices on some items. Credit Suisse expects about 10% upside on the stock based on normal conditions.

Argus Research rates GIS at Hold but admits it's a stock they "would like to get on our Buy list."

"We like management's efforts to create a differentiated portfolio of brands for health-conscious customers and to generate a higher percentage of revenue from new products," Argus analyst Christopher Graja says.

• Market value: $14.2 billion
• Dividend yield: 3.2%
• Industry: Packaged foods

Campbell Soup (CPB, $46.93) is one of the first names people think of when the economy goes sour. While it's typically a good performer in down markets, and while the pandemic caused a brief rush on the company's soup, emptying shelves, other issues have weighed on shares since.

Still, it could be one of the best stocks to buy now for a defensive posture.

CEO Mark Clouse, who took the helm in early 2019, had been CEO of Pinnacle Foods before its acquisition by Conagra (CAG) and spent most of his career in Kraft's snack division, renamed Mondelez International (MDLZ) after its spinoff. CPB shares are up 33% since Clouse came aboard, underperforming the market but marking a clear turnaround after a couple years of declines.

Levin Easterly Partners' Hendel, who calls Clouse "a strong CEO," acknowledges that soups are in a secular decline. Regardless, he notes that the consumer staples sector has "held up very well during the pandemic" and, in a downturn, investors will pay more for these stocks' earnings thanks to their stability.

Growth in 2020 was led by Campbell's "meals and beverage" division, which includes V8 juices, broths and Prego sauces, as well as the namesake soup. Clouse has shed Campbell's baking aisle, selling the Ecce Panis artisan bread brand to Jimmy's Cookies earlier this year. He is also closing a snack plant in Georgia that had been part of Snyder's-Lance, which it bought for $6.1 billion in 2018.

Argus Research has a Hold rating on shares but left the door open to "potential scenarios under which we could become more bullish on CPB." That was after the company raised its dividend 6% in December.

YH&C Investments' Bock notes Campbell's dependable cash flow and income that should help it survive another market downturn.

• Market value: $211.7 billion
• Dividend yield: 3.4%
• Industry: Beverages

Coca-Cola (KO, $49.01) is a company that, of late, deserves a little more explanation. They're not just about sugar. They're about safe drinking water at $10/gallon. Coke now has eight different brands of bottled water, including Dasani and SmartWater.

They're about so much more, too. Under James Quincey, an Englishman who became CEO in 2017, Coca-Cola has focused on improving margins and its image, selling sugary soda in smaller cans, and severing ties to a pro-sugar group accused of slanting its research. His biggest acquisition so far has been Costa Coffee, an English chain of coffee shops similar to Starbucks (SBUX). He also bought up the 57.5% of Fairlife, a milk company, that Coca-Cola didn't already own.

But it hasn't been all additions. Argus Research's Graja, who rates Stock at Buy, notes that Coca-Cola "eliminated more than 600 'zombie,' or unproductive, products in 2019 and worked to reposition the business through changes in core products."

"We expect Coke to be a stronger company when the pandemic fades," he says. "We expect the combination of more focused marketing and a more profitable brand portfolio to boost earnings and the share price as the away-from-home business rebounds."

Creighton's Robert Johnson, co-author of Investment Banking for Dummies, says KO is one of the best stocks to buy now in anticipation of any market downturn thanks in part to its steady dividend, which has been improved upon for 58 consecutive years. He also notes that its market share in juice, water, bottled tea, coffee and even energy drinks gives Coke a diversified revenue stream.

• Market value: $47.2 billion
• Dividend yield: N/A
• Industry: Auto manufacturing

Ford (F, $11.37) has long been a dirt-cheap automaker, both in nominal price and valuation. Ford shares only recently broke the $10-per-share level, and currently trade at just 10 times forward-looking earnings estimates.

The company was in rough shape last year, suspending its dividend in March to conserve cash during the pandemic. While it reported a $1.28 billion net loss in 2020, the company says it should earn between $8 billion and $9 billion in adjusted profits (pretax) in 2021, and turn about $3.5 billion to $4.5 billion of that into adjusted free cash flow. Some believe it could reboot its dividend as soon as this year.

While electric car stocks have lapped those from traditional automakers like Ford, the firm is still in the race with an electric Mustang Mach-E and a stake in Rivian, an electric truck startup. The firm also plans on investing $29 billion in EVs and autonomous vehicles over the next four years. Fortunately, Ford's F-series trucks remain in heavy demand, throwing off the cash the company needs to play catch-up in electrics.

Cornerstone Financial's Milan says "Ford is finally positioning itself well to be major players in the electric vehicle space," especially in high-margin truck and commercial van markets.

Joseph Hogue, founder of the Let's Talk Money! channel on YouTube and a former Wall Street analyst, thinks Ford "could keep heading higher on a strong outlook for auto sales." With a personal savings rate of 13% during the pandemic, a multidecade high, Americans "could be thinking of larger purchases" like a new car.

Creighton's Robert Johnson adds Ford has "a solid corporate governance and management team in place" and even prefers Ford at current levels to Tesla (TSLA). But that's because its dirt-cheap price provides a level of defense.

"Investors committing funds to Ford have a much higher margin of safety" than those in Tesla, he says.

COVID-19 was a gut punch to everyone’s finances, but millennials were hit particularly hard. In an August 2020 Vanguard survey, 57% of millennials reported that COVID-19 had a negative effect on their finances. Now millennials, myself included, are ready for a financial reset, and for some that means finding a financial planner. More than 50% of millennials haven’t received any professional financial advice, but they’re increasingly interested in talking to a planner, according to the same survey. However, good help can be hard to find.

Financial planners across the board agree that lack of financial assets is one of the biggest barriers that millennials face when seeking help. A traditional money management firm may require clients to have at least $250,000 (or more) in investments—and usually bases its fees on assets under management. And even though online brokers and robo advisers may have low-minimum and low-cost options, they tend to focus on investing rather than providing advice on issues such as how to pay off your student loans. (See more on robo advisers.)

Plus, the internet, including social media, has caused confusion about what constitutes financial planning. “Millennials are being exposed to apps that focus only on investing as opposed to holistic financial planning,” says Marsha Barnes, founder of The Finance Bar, a website that provides financial coaching and education. “These apps appear to help you build wealth, but they miss certain areas of financial planning, such as living on a budget, net worth and taxes.” Worse, social media influencers may promote risky investments without disclosing conflicts of interest, says Chris Struckhoff, a registered investment adviser and founder of Lionheart Capital Management.

Subscribe and thrive. To offer true financial planning at a price that millennials can afford, planners are turning to services such as Netflix and Hulu for inspiration: Customers pay a set amount each month to receive a certain level of service. Since 2014, XY Planning Network has provided a platform for financial advisers to use this model to provide affordable financial planning services to young adults. Monthly subscriptions vary, with some advisers basing their price on your income. (Some planners in the network are also offering pro bono financial planning services to people who have been adversely affected by the pandemic.)

“Originally, I wanted to follow the assets-under-management model, but it’s not practical for most younger clients,” says Jovan Johnson, a certified financial planner and founder of Piece of Wealth Planning, which provides subscription services. “With the subscription model, clients can include the monthly fee in their budget,” he says. Johnson starts with a free 45-minute consultation to determine your goals and see if his services are a good fit. Services cost $200 a month, and clients can cancel at any time.

A few planners are tinkering with the idea of small financial communities. Lori Atwood, a CFP and founder of Atwood Financial Planning (AFP), discovered that millennials often want confirmation that their finances are on track, and many thrive in a group. With AFP’s small group planning courses, participants are encouraged to exchange ideas with peers while a financial planner guides each of the five sessions. The cost is $250, with no other commitments.

Whether you work better in a group or one-on-one, it’s important to make financial planning a priority. For myself, I know I can shift some of my shopping energy to finding and paying for a financial planner. If you’re interested in hiring a planner—someone you met through your parents, for example—ask whether the adviser offers a payment plan you can afford.

Boats, name-brand clothing, iPhones — the list of luxury products available to consumers is endless. But which ones are worth their salt? Where will consumers' money be most content before it’s tired and begging for something new?

Defining “worth” is a deeply personal exercise. Some items deliver great performance and are unarguably worth their price tag. Others are more about feelings, connection and experience. While it’s not always necessary to splurge, there are many products and services that are not only higher in quality but will also save you in the long run.

Better Service, Lower Cost

There is nothing better than finding a product or service that costs less and performs better than the old options. For example, cable has become synonymous with continually rising rates, not to mention the taxes. Those who own a “smart” TV or a streaming device can replace cable with monthly subscriptions to Netflix, Hulu, YouTube TV, Amazon Prime and Disney+. Streaming services offer a personalized experience, provide significantly more content for less money and are always there when users want them.

When it comes to finding better goods for less, Amazon Prime is a top contender. For a small monthly fee, consumers can skip the shipping costs or set up monthly auto ship, get free music, e-books and video content, enjoy discounts at Whole Foods and more.

Warehouse memberships are another great value. Costco and Sam’s Club typically offer better products, but for less money, by selling them in larger quantities, plus the added perks of travel agents, car discounts, free shipping and more.

Better Quality, Better Life

Admittedly, saving $3 on a box of 4,000 crackers doesn’t always seem like a home run. But sometimes, avoiding the lowest-cost option will hit it out of the park. Paying up for products that improve quality of life can really pay off in the long run.

One example is a great mattress and pillow. Scientists continue to attribute orthopedic issues, stress, high cholesterol and many other ailments to quality of sleep. More than ever, it's apparent that a higher-priced and better-built mattress can lead to improved sleep and health, superior performance at work, lower stress levels and better quality of life.

Other worthwhile purchases include electric toothbrushes and quality running shoes. As an upgrade from the humble manual toothbrush, an inexpensive electric toothbrush can prevent many unpleasant and expensive trips to the dentist. A good pair of running shoes will last longer than a cheap pair, saving money on replacements. It will also prevent injuries, saving money on health care and avoiding pain and suffering.

Finding the “best” option for the money can pay dividends over a lifetime of use. For consumers who cook every night, top-quality cookware and knives are a sound purchase and should never need to be replaced. A kitchen stocked with a few high-end tools will yield better results, less cleanup, less clutter and a happier dining experience. They can even make healthy cooking easier and save money on eating out. For instance, one study showed that consumers who cook at home eat more vegetables.

Beyond material goods, experiences can be worth spending more on. Taking time for self-care can relieve stress and boost quality of life. Massages, manicures and facials can alleviate pressure points and built-up tension. Once considered “luxury” services for the elite, they have become mainstream self-care measures. Money spent on a vacation is well spent; new experiences in a relaxing setting can help consumers rest and recharge so they can perform better at work and build their personal relationships. Simple but effective self-care plays a vital role in better all-around wellness, leading to higher earnings and lower health care costs later.

A High-Quality Investment Today Can Last a Lifetime

What about those really expensive items? What is “expensive”? Typically, it's simply viewed as “costing a lot of money.” However, economists define it as a price that makes consumers feel they are paying too much for what they are getting in return. When consumers think they are getting what they paid for, then it's a fair trade. They get a bargain when they feel they are getting more than what they paid for. Further, it can be more affordable in the long run to buy a quality product once than to buy a cheap product repeatedly.

A knowledgeable financial planner can help consumers chart a path to financial success, including what they can pay for a valuable item. Investing in better products and experiences is a good decision for those who have the means. A financial planner or adviser is yet another worthwhile investment, not only saving clients the amount of their fee, but turning that investment into a long-term dividend and maximizing buying power.

Everyone is looking for ways to save money, but buying superior products and services at a greater up-front cost can reduce repeat expenditures and improve quality of life, saving time, money and health in the long term. Although some products are worth the expense for nearly everyone, consumers must identify their priorities and make wise decisions. Working with a financial planner can help them understand what they value and take the first step toward investing in products and services that are worth their price.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Stocks largely remained in limbo Wednesday as Washington continued negotiating to pass a stimulus bill ahead of the Nov. 3 elections.

The Federal Reserve kept the pressure on, insisting yet again that the economy needs another relief measure. "Apart from the course of the virus itself, the most significant downside risk to my outlook would be the failure of additional fiscal support to materialize," Fed Governor Lael Brainard said to the U.K.'s Society of Professional Economists on Wednesday. "Too little support would lead to a slower and weaker recovery."

But the market wasn't light on action.

Social app Snap (SNAP, +28.3%) rocketed higher following a surprise adjusted quarterly profit. Its report also signaled a "bonanza for online advertising," according to Deutsche Bank, that lifted competitors such as Facebook (FB, +4.2%) and Pinterest (PINS, +9.0%).

“We continue to like Snap shares, despite the (large stock-price move Wednesday), and see upside potential to the company’s 47-50% growth comments for 4Q given the improving ad environment and the company’s strong positioning into 4Q,” writes Lloyd Walmsley, who upgraded his price target from $32 per share to 440.

Netflix (NFLX, -6.9%), on the other hand, sagged on worse-than-expected Q3 earnings and subscriber totals. The company's 2.2 million net subscribers were below both its own previous forecast and Wall Street's models, while earnings of $1.74 per share were well below estimates for $2.13.

“Content migration to competing services and price hikes may slow subscriber growth,” writes Wedbush analyst Michael Pachter (Underperform), “and historically negative (free cash flow) with minimal commitment to positive FCF ahead makes DCF valuation speculative.

The Dow Jones Industrial Average finished 0.4% lower to 28,210.

Other action in the stock market today:

• The S&P 500 edged 0.2% lower to 3,435.
• The Nasdaq Composite drifted 0.3% lower to 11,484.
• The Russell 2000 took a larger tumble, dropping 0.9% to 1,603.

The economy remains maddeningly socially distanced from either an all-clear signal and a tornado siren. Scott Knapp, chief market strategist at CUNA Mutual Group, is looking at the financial sector's recent results as a proxy for the overall economy:

"The sector is passing the test overall, but individually it's a mixed bag … the canary in the coalmine is chirping, but not very loudly – and I'll be watching to see if this continues."

Wall Street might be stuck in wait-and-see mode, but you don't have to wait and see as it pertains to building your long-term wealth.

We've recently begun our annual look at the most popular funds in 401(k) accounts, starting with Vanguard's large suite of buy-and-hold products.

Now, we move on to the stock-picking experts at Fidelity. As Kiplinger's senior associate editor Nellie Huang writes, "The firm is home to some of the industry's best fund managers ever" – and it shows both in the popularity and performance of its funds. Read on as we analyze and rank each of Fidelity's actively managed funds that are popular in 401(k) retirement accounts, including its target-date products.

Kyle Woodley was long FB as of this writing

It wasn't pretty, and it wasn't by much, but the S&P 500 officially exited bear territory on Tuesday and greeted a new bull market.

Stocks were helped out by U.S. housing starts, which jumped 22.6% month-over-month to a seasonally adjusted annual rate of just under 1.5 million.

Blerina Uruçi and Pooja Sriram of Barclays Investment Bank say three major factors are behind the recent pace: a return of pent-up demand, historically low mortgage interest rates and a shift as households move to the suburbs, but "pent-up demand is not likely to be sustained so we would not expect to see double-digit increases in starts on a sustained basis in the coming months."

"However," they say, "the direction of travel is upward in our view and we expect low mortgage rates and demand for suburban homes to continue pushing starts gradually higher in the coming months."

The earnings calendar, heavy on retailers this week, also spoke a little to the strength of the U.S. consumer.

Home Depot (HD, -1.2%), among 2020's hot housing market stocks, saw its most recent quarterly sales and profits surge 23% and 25%, respectively, to beat analyst estimates. Meanwhile, Walmart (WMT, -0.8%) reported that e-commerce traffic nearly doubled-year-over year and posted its biggest earnings surprise in more than three decades. But both stocks had little to show for it.

Instead, the market's strength yet again came from mega-cap tech and tech-adjacent names.

Amazon.com (AMZN, +4.1%) jumped after announcing it would hire 3,500 tech and corporate jobs in six cities, and spend $1.4 billion expanding its offices. Netflix (NFLX, +4.8%) and Google parent Alphabet (GOOGL, +2.6%) also made significant gains to push the Nasdaq Composite 0.7% higher to 11,210, yet another all-time high finish. The Dow Jones Industrial Average declined 0.2% to 27,778, and the small-cap Russell 2000 lost 1.0% to finish at 1,569.

The "broader market," however, finally got over the hump. The S&P 500 gained 0.2% to 3,389, surpassing its Feb. 19 all-time highs by a mere 3 points. That confirms a bull market for U.S. stocks that officially began off the March 23, 2020 bottom.

What's Next for the New Bull Market?

Sam Stovall, Chief Investment Strategist of U.S. Equity Strategy at CFRA, points out that "like the messenger from Marathon, bull markets typically (slump) from exhaustion an average of 2.5 months after reaching such a recovery milestone." However, the average declines have been modest, at 8%, before stocks resume their advances.

Even if that comes to pass, there's reason to believe a resulting climb would have fundamental help.

"Estimates for future quarters have tended to fall as earnings were being reported in previous seasons," says Jeffrey Buchbinder, Equity Strategist at LPL Financial. "This quarter was a different story, with a 1.4% increase in the next 12 months' S&P 500 earnings estimates since the second quarter ended, reflecting upbeat guidance from Corporate America.

"While that may not seem like much, and we still may not see positive earnings growth until early 2021, this encouraging development increases the chances that estimates for the third and fourth quarters may prove to be too low."

In the short term, look for potential dips in areas such as e-commerce stocks and artificial intelligence companies – these red-hot picks might be due for profit-taking should the market take a breather, allowing new investors to jump in and harness their longer-term potential.

But Wall Street's pros think several hot hands in 2020 still have more room to run. Here, we look at seven stocks that are already up anywhere between 24% and 260% year-to-date, but that the analyst community believes haven't quite reached their ceiling.