The latest calls from Wall Street and the press.
Fundstrat’s Tom Lee reckons the [.custom-color]Russell 2000 Index[.custom-color]—a small-cap US stock index—could rally 40% amid a shift in Federal policy. He thinks there will be a rotation out of large-cap stocks, which could weigh on the S&P 500 and its potentially "overvalued" tech stocks. The index has gained 11.95% over the last month.
“We have small caps even more oversold and valuations—whether you look at medium P/E, which is now at 10 times 2025 earnings—even lower… So we think that this move could be something like 10 weeks and as much as 40%. So I think it is just starting.” He added that he thinks the rotation will become evident in August.
[.custom-color]Uber[.custom-color] was given a $90 price target by Wolfe Research who expect to see continued strong demand for its core product.
[.custom-color]Shopify[.custom-color] is turning a corner by managing to balance growth and margins, according to Bank of America. They now rate it as a Buy with a price target of $82—an 18% upside over the current price. According to them, Shopify “is likely to continue to consolidate the vast small business market of 5.2 million businesses in the US alone." Shopify is set to report its second-quarter earnings on August 7th, but this date is subject to change.
[.custom-color-downgrade]Reddit[.custom-color-downgrade] was downgraded to Hold from Buy by Loop Capital. Even though they think Reddit might outperform revenue expectations, they think the firm has potentially reached a peak valuation when compared to its peers and that the risks inherent in the company do not outweigh the potential for upside.
[.custom-color-downgrade]Palantir[.custom-color-downgrade] was downgraded to Underperform by Mizuho, with a price target of $22 (it's currently at $28). Analyst Greg Moskowitz said, “But primarily, following the material 67% rise in the shares YTD, we find it increasingly difficult to justify PLTR’s high multiple (21x CY25E revenue) that, in our view, likely already discounts significant acceleration versus our consensus expectations for 20-21% revenue growth.”