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Mizuho cuts targets on quantum stocks but keeps strong upside outlook. (0:15) Broadcom gains after long-term AI chip deal with Google. (1:17) Durable goods orders fall on weak aircraft demand. (1:40)
This is an abridged transcript of the podcast:
Our top story so far, Mizuho is dialing back its near-term enthusiasm on quantum computing, cutting price targets on D-Wave Quantum (QBTS), IonQ (IONQ) and Rigetti Computing (RGTI) while maintaining Outperform ratings on all three.
The firm lowered D-Wave’s target to $31 from $40, Rigetti’s to $33 from $43, and IonQ’s to $61 from $80.
Despite the reductions, analyst Vijay Rakesh said the firm still sees more than 100% upside and remains constructive on the long-term quantum roadmap, which it views as being in the early stages of an inflection.
Mizuho expects IonQ to maintain leadership in trapped-ion quantum computing, projecting roughly 68% CAGR over the next decade. Rigetti and D-Wave could each capture about 10% market share by 2030.
The firm also highlighted D-Wave’s dual-platform approach, annealing and superconducting modalities, as a potential competitive edge over time.
Among other active stocks, Microsoft (MSFT), Spotify (SPOT) and Viking Holdings (VIK) were added to Bank of America’s U.S. 1 list, which represents the firm’s top Buy-rated U.S.-listed ideas.
Broadcom (AVGO) is higher after signing a long-term deal with Google (GOOG) (GOOGL) to develop future generations of its custom AI chips, known as tensor processing units, through 2031.
Universal Music (UMGNF) is rallying after Pershing Square Capital Management submitted a non-binding proposal to acquire all outstanding shares at a nearly 80% premium, valuing the company at about €56B.
Looking to the economy, February durable goods orders fell 1.4%, steeper than the expected 0.2% decline and below January’s revised 0.5% drop.
Excluding transportation, new orders rose 0.8%, slightly ahead of the 0.7% consensus. Excluding defense, orders fell 1.2%.
Pantheon Macro said the headline decline was “entirely due to a 37% plunge in the volatile aircraft orders component,” reflecting a weak month for Boeing.
While core measures modestly beat expectations, Pantheon cautioned that the broader trend in both ex-transportation and nondefense capital goods orders “looks far softer.”
In other news of note, Delta Air Lines (DAL) became the latest major airline to raise fees for checked bags on domestic and select short-haul international routes. Amid rising fuel costs, higher baggage fees are easier to pass off to consumers than bumps in airfares.
The fee increase for Delta on its domestic routes is the first in two years and follows similar moves by rivals United Airlines (UAL) and JetBlue Airways (JBLU).
Delta is increasing the fees for first and second checked bags to $45, up from $35, on domestic and some short-haul international routes. The biggest hike is on the third checked bag, which is going up by $50 to $200.
And in the Wall Street Research Corner, Benchmark Equity Research has released its quarterly update to the firm’s “best ideas” list, featuring 29 high-conviction, catalyst-driven picks.
New additions include IMAX (IMAX), CrowdStrike (CRWD) and Lifeway Foods (LWAY). Vital Farms (VITL) was removed.
See the full list here.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
