A $0.30 Stock With Trillion-Dollar Potential 👀

Good morning. It's July 19th, and today we cover how cybersecurity firm CrowdStrike‘s stock crashed after a major internet outage while a $35 billion deal in the finance sector hangs in the balance amid community concerns.

Before we jump into that, can you check out the poll below and let me know your thoughts?

Previous Close 📈

All three key indices fell yesterday as investors continued to shift their focus away from expensive megacap growth stocks.

Futures

Stock futures remain flattish as a week marked by rotation trading nears its end.

What to Watch

The second quarter earnings season is picking up steam. Today, American Express, Schlumberger, and Halliburton will release their earnings before the bell.

Watch out for speeches by New York Fed President John C. Williams at 10:40 a.m., followed by Atlanta Fed President Raphael Bostic at 1:00 p.m.

Media

Netflix Reports Strong Subscriber Growth, But Stock Slips as Revenue Forecast Falls Short

Netflix reported its second-quarter earnings, revealing 8.05 million new subscribers, surpassing expectations. Revenue for the quarter hit $9.56 billion, a 16.8% increase from last year and higher than market expectations. 

However, its revenue forecast for the third quarter fell short at $9.73 billion against an anticipated $9.83 billion, causing its stock to fall by nearly 6% in after-hours trade.

The stock recovered in pre-market trade but is still trending slightly below yesterday's closing.

The company updated its full-year 2024 revenue growth projection to 14%-15% and expects operating margins to rise to 26%.

Earnings per share for the quarter were $4.88, higher than the expected $4.74.

A $0.30 Stock With Trillion-Dollar Potential

While tech giants focus on chatbots, one overlooked company is quietly revolutionizing public safety using AI in a market projected to grow at a 41.8% CAGR through 2031.

With increasing concerns about public safety and the security robots market projected to reach $120 billion by 2030, this company is strategically positioned to capitalize on these booming trends.

In 2023, they saw a 128% revenue surge, reaching $12.8 million, yet their market cap is only $35 million.

Take advantage of this $0.30 gem before Wall Street catches on!

Technology

Cybersecurity Firm CrowdStrike Faces Stock Drop Amid Global Disruption

CrowdStrike experienced a significant drop in its share price, plunging 20% in premarket trading after an update led to a widespread IT outage affecting businesses globally. The cybersecurity company's Falcon Sensor product update caused system crashes, impacting Windows hosts worldwide.

The outage also saw Microsoft shares dip by 2.5% as issues arose with its Azure cloud services and Microsoft 365 suite. Various websites went down, grounding planes and halting TV studio broadcasts due to the ongoing IT issues.

CrowdStrike is currently rolling back the problematic update to restore normalcy. The outage highlights the vulnerability in the cyber supply chain, where a single point of failure can have widespread effects.

While CrowdStrike's stock tumbled, competitors in the cybersecurity sector saw gains. Palo Alto shares increased by 5%, Fortinet climbed 2%, and both Zscaler and Cloudflare were up by about 1% in premarket trading.

Banking

Community Groups Challenge Capital One's $35 Billion Discover Deal

Capital One executives, led by CEO Richard Fairbank, will address community concerns at a public meeting on Friday regarding the proposed $35 billion merger with Discover Financial Services.

The merger aims to create the largest U.S. credit card issuer and the sixth-largest bank by assets. While supporters believe the deal will boost competition in card payments, opponents worry it could reduce services, increase costs, and pose risks to financial stability.

The Federal Reserve and the Office of the Comptroller of the Currency (OCC) have arranged the meeting, responding to political pressure for rigorous merger reviews. Opponents, including Maxine Waters, the National Community Reinvestment Coalition (NCRC), and Public Citizen, will present their arguments against the merger.

Capital One has committed $265 billion over five years to lending, philanthropy, and investment if the merger proceeds to mitigate criticism. This pledge, the largest of its kind, will be scrutinized during the meeting.

Regulators will evaluate the merger's impact on community needs, financial stability, and competition. The review process could extend for months, with endorsements from community groups potentially swaying the decision in favor of Capital One.

Serve Robotics Inc [SERV] - Last Close: $2.63

Serve Robotics shares went through the roof in pre-market trade today.

The stock was already trending 12.4% higher at the close of markets yesterday after Nvidia disclosed that it had invested in the firm.

In pre-market trade, the stock is again trading nearly 85% higher than the previous close.

Postmates, an Uber subsidiary, is one of the biggest shareholders in Serve Robotics.

My Take: This could be one to watch going forward. NVIDIA's cosign could go a long way.

Hawaiian Electric [HE] - Last Close $12.75

Hawaiian Electric shares were trending nearly 37% higher in pre-market trade.

The company’s shares rose after news broke that it and other defendants had agreed to settle lawsuits over the Maui wildfires in Hawaii last year.

The settlement will likely be nearly $4 billion, of which Hawaiian Electric is expected to bear nearly $1.5 billion.

My Take: With this major litigation in the rearview, the stock could continue to trend higher.

Plug Power [PLUG] - Last Close: $2.92

Plug Power shares slipped by more than 10% in pre-market trade.

The alternative energy firm’s stock fell after it announced an underwritten public offering of $200 million of its common stock.

The stock is already down by nearly 37% year to date due to profitability woes, following successive poor earnings results.

My Take: EV stocks are not in favor right now. This one is a pass until industry-wide issues get addressed.

Everything Else

• Trump promises an end to the EV “mandate” on his first day in office.

• GE Aerospace will enhance engine repair facilities with $1B investment.

• International customers help Halliburton post higher quarterly profits.

• ECB Survey reveals slower wage growth expectations for eurozone businesses.

• 35,000 public workers will receive $1.2B in student debt forgiveness from Biden.

• TSMC shares plunge in line with Nasdaq despite strong earnings.

That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.

Best Regards,

— Adam Garcia
Elite Trade Club

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