The S&P 500’s (SPY) new high and new lows list is a tale of rising technology and falling “old” businesses.
Broadcom (AVGO) added another 5.4% yesterday to close at a new high of $1,828.87. Rising for seven straight sessions, the 63.84% YTD return appears too good to be true. Micron (MU), which sells memory chips, benefited from increased demand driven by AI server sales. The stock now trades at a forward price-to-earnings ratio of 16.6 times.
In the electronics retail sector, Best Buy (BBY) broke out to close at $91.26, a new high. This time, however, shares rose after UBS upgraded the stock and issued a $106 price target. Value investors should be wary of stock rallies driven by analysts. BBY stock trades at a 16 times P/E ratio.
In the lithium mining sector, Albemarle (ALB) fought off the selling that sent the stock below $99.99. Lithium prices show no signs of stabilizing. Bears are confident in their bet against ALB stock. At the end of May 2024, shares sold short was 13.6%.
Streaming media stocks, except Netflix (NFLX) are in a bear market. Warner Bros. Discovery closed at $7.16 on no news. Investors are betting that consumers will cancel their subscriptions to save money. Conversely, Paramount’s (PARA) new low may increase the odds that WBD buys the firm. This increases its debt and risks for WBD shareholders.
