August was a turbulent month for the US stock market, as the S&P 500 index lost most of the growth that was observed in the first few days of the month.
The main reason for such unstable dynamics was the talk in the Federal Reserve System, which may end with the expected reduction of the multibillion-dollar asset purchase program of the central bank. The fall in Chinese stocks also added some volatility to the markets.
The following five most traded stocks show which stocks were in demand among traders at the end of the summer.
These five companies demonstrate solid fundamentals and growth prospects that set them apart from the crowd.
Stocks worth paying attention to in September 2021: a retrospective of August
Below you will find an explanation of why the following five stocks were of interest to investors in August 2021.
1. NVIDIA (NVDA)
NVIDIA reported good results in the second quarter of 2021. Revenue increased by 68.2% compared to the same period a year ago to $6.51 billion, and adjusted earnings per share more than doubled year-on-year, reaching $1.04 compared to $0.55 per share last year, which the company reported in the second quarter of last year.
Such an impressive dynamics was primarily due to the growth of two main components of the company's revenue: a 35% increase in data center revenue and an 85% jump in the gaming segment. Its smaller segments, such as original equipment manufacturing (OEM) and professional visualization, more than doubled their performance compared to the second quarter of fiscal 2021.
Moreover, the company recently announced that it has entered the promising metaverse market after launching a platform called Omniverse, an ecosystem in which developers will be able to create and launch virtual worlds for consumer interaction.
"We still like Nvidia's history, and we see the company as a best-in – class player in the field of artificial intelligence (AI) with the possibility of growth before the introduction of next-generation network devices/data processing devices (DPU)," commented Hans Mosesmann of Rosenblatt Securities after the publication of an optimistic NVIDIA report.
The combination of a reliable balance sheet, high past performance and attractive growth prospects makes NVIDIA the company whose shares are worth watching.
2. Tesla (TSLA)
Despite a short-term drop in Tesla shares, which occurred a few days ago amid news of an investigation by the National Highway Traffic Safety Administration (NHTSA) aimed at the company's autopilot function, its share price recovered after the unexpected launch of the Tesla Bot.
This humanoid robot, which was introduced last Thursday by the company's founder and CEO Elon Musk, is designed to help people perform " dangerous and repetitive tasks."
Despite the fact that initially the company's shares reacted negatively to this news, ending Thursday's session with a fall of 2.3%, then they grew.
Daniel Ives, managing director of Wedbush and senior securities market analyst, called the Tesla bot "an absolute conversationalist." He expressed concern about the implications of the announcement for Tesla's stock price at a time when the company is facing increasing regulatory scrutiny.
3. Robinhood (HOOD)
Robinhood shares have been in a downtrend since they peaked after the initial public offering (IPO) at $85 per share. Meanwhile, the price movement has already filled the bullish gap left on the day when stocks unexpectedly rose to these levels.
This decline was partly influenced by the company's gloomy comments in the latest quarterly report, as management warned investors about the "seasonality" that could affect business results in the third quarter of 2021.
"For the three months ending September 30, 2021, we expect that seasonality and lower trading activity in the industry will lead to lower revenues and significantly fewer new replenished accounts than in the previous quarter," the management team noted in the second quarter results.
The weakening of the favorable effect of the pandemic and the decline in prices and trading volumes of Dogecoin (DOGE) – one of the cryptocurrencies supported by the Robinhood platform – may contribute to such a slowdown. Investors seem to be disappointed with this statement, as the shares fell by more than 10% on the day of the report's publication.
Moreover, in the second quarter of 2021, the average revenue per user (ARPU) fell to $ 112, which is 18% less than in the previous quarter, while transaction revenue increased by only 7.4% compared to the first quarter of the year. This quarterly jump was significantly less than the 79% growth that the company consistently reported during the first quarter of 2021.
4. AMC Entertainment (AMC)
The price of AMC shares has been in a downward trend since they reached a daily high of 72.6 USD per share on June 2. They are currently trading 49% below these levels.
Despite the fact that after the announcement of financial results for the second quarter of 2021, the company's shares initially rose, the session ended with a 6% decrease in the share price.
For the second quarter of 2021, the company reported revenue of $444.7 million. This is significantly more than $ 18.9 million a year earlier, amid the closure of theaters due to the pandemic.
This result far exceeded the consensus forecast of analysts compiled by Refinitiv of $382.1 million for the period.
Since the release of the report, trading volumes have remained stable and below the average for 10 days. The shares are gradually growing, although they remain in a downward trend.
Further, if the shares fail to reach a higher maximum in the daily price movement, the directional pattern indicates a further decline in the price of AMC Entertainment shares.
At the same time, momentum indicators send buy signals, as the relative strength index (RSI) has risen above 50, while the MACD has just crossed the signal line, which is accompanied by increasingly high positive data from the momentum indicator.
5. Virgin Galactic
The share price of Virgin Galactic has been very volatile over the past few months due to a variety of events, including the approval of a license for commercial space flights by the US Federal Aviation Administration (FAA) and a successful test flight with Sir Richard Branson as a passenger.
Moreover, the company reported its financial results for the second quarter of 2021 and announced that it has resumed ticket sales for new passengers with almost $82 million in customer deposits.
But of all these events and announcements, the sale of $500 million worth of ordinary shares at a price of $49.2 per share had the greatest impact on the price. The sale, which took place on July 9, immediately led to a 6.6% drop in the stock, followed by several other notable intraday movements, including a 17.3% increase on July 12 and a 12.4% drop on July 14.
It is impossible to predict whether the stock price will recover to the levels preceding the placement, but the daily chart shows that the lower trend line of the symmetrical triangle model, which was formed in recent months, has now been broken.
Conclusions
It is important to remember that, despite good results in the past and seemingly reliable fundamentals, future positive returns on these shares cannot be guaranteed.