Why Yahoo! and Micron Technology are Rising

Shares of Yahoo!, Micron Technology, and Facebook are the among the most active tech stocks on Monday.

Jun 30, 2014 at 11:30AM

The Dow Jones Industrial Average (DJINDICES:^DJI) was just above breakeven as of 11:30 a.m. EDT. As the market moved into the green, a few tech stocks were experiencing significant rallies, including Yahoo! (NASDAQ:YHOO) and Micron Technology (NASDAQ:MU). Facebook (NASDAQ:FB) was seeing notable volume.

Yahoo! rises on analyst upgrade
 shares rose more than 2.3% in early trading after Piper Jaffray upgraded the Web portal. Piper Jaffray had been neutral on Yahoo!, but raised its rating to overweight in a note to clients released early on Monday. Piper Jaffray believes Yahoo! shares could be worth $43 -- about a 22% premium from current levels.

Piper Jaffray's upgrade is primarily based on its optimistic outlook for Alibaba, the Chinese e-commerce giant. Yahoo! owns 22.6% of Alibaba, about half of which it is required to sell in Alibaba's upcoming IPO. That will generate substantial cash for Yahoo! -- recent estimates put the total at about $10.4 billion. And Piper Jaffray's expects that Alibaba's valuation will rise as its IPO date nears.

Optimism for Alibaba should result in appreciating Yahoo! shares, though what the company actually does with the cash remains to be seen. Yahoo! once owned 40% of Alibaba, but sold about half of its stake in 2012. Most of the cash from that sale was used to repurchase shares -- directly benefiting investors. But Yahoo! has been on an acquisition streak lately and could plow the Alibaba cash back into its core business.


Source: Derzsi Elekes Andor via Wikimedia Commons.

Facebook flat amid emotional controversy
Facebook shares were largely unchanged early in the session despite the recent controversy generated by a secret psychological study.

In 2012, Facebook researchers secretly tinkered with the news feeds of some 700,000 users; it adjusted the algorithm so as to showcase a disproportionate number of positive or negative stories, then looked for signs of emotional changes in test subjects. Ultimately, researchers concluded that Facebook stories could sway the user's mood, reinforcing emotions with a contagion-like effect.

Although less than 0.1% of users were impacted by the study, it has generated a degree of backlash, with some observers accusing Facebook of crossing ethical boundaries. There is the question of whether Facebook's researchers violated the principal of informed consent -- per the ethical rules of psychological studies, test subjects need to be aware of their participation.

Ethical questions aside, the controversy generated by the study poses some degree of risk to Facebook. If enough people find fault with Facebook's behavior, they may leave the social network, or at least significantly reduce their engagement. Competitors, which have thus far been unable to gain a foothold, could play on Facebook's willingness to manipulate its users' experience on the site.

For the time being, there is no sign that this story will have a lasting impact on Facebook. Still, investors should be mindful of the potential negative ramification.

Micron jumps on positive note
Micron Technology shares rose nearly 4% after Credit Suisse added the stock to its "Focus List."

Credit Suisse is positive on Micron Technology, and has been for some time. Adding the memory-chip maker to its Focus List, however, may signal an even greater belief in the relative strengths of the company. Credit Suisse has a $50 price target on Micron, suggesting a premium of more than 50% from current levels.

Credit Suisse continues to like the company's diversification efforts and potential for gross-margin expansion. Other analysts and famed investors have also been bullish on the stock. Hedge fund manager David Einhorn, for example, has a large position in the company.

Micron shares have risen more than 125% in the last year. Yet, despite its recent rally, Micron remains relatively cheap on a valuation basis -- trading with a below-market price-to-earnings ratio.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple, Facebook, InvenSense, and Yahoo. The Motley Fool owns shares of Apple, Facebook, InvenSense, and Yahoo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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