Investment Insights: Evaluating BlackRock (BLK) and Goldman Sachs (GS) Stocks Post Q2 Earnings

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By Ronald Tech

BlackRock’s Q2 Triumph

BlackRock showcased remarkable performance in the second quarter, marking its strongest showing and highest growth rates since the pandemic. The company bolstered its margin by 160 basis points, hauling in $80 billion in new assets. Notably, a 3% annualized organic base fee growth was achieved, the highest in three Q2s. As Q2 came to a close, BlackRock boasted a record Assets Under Management (AUM) surpassing $10.6 trillion.

Goldman Sachs’ Stellar Quarter

Goldman Sachs emerged victorious in Q2, surpassing both top and bottom-line expectations by 1%. With Q2 EPS hitting $8.62 and sales totaling $12.73 billion, the bank saw a staggering 180% year-over-year leap in earnings. Quarterly sales were up by 17%, showcasing superior profitability with total operating expenses reduced to $8.53 billion. Goldman’s AUM escalated by $86 billion, securing a record level of $2.93 trillion.

Comparing Performance & Valuation

Goldman’s stock has surged an impressive 50% year to date, outshining the S&P 500’s 25%, while BlackRock’s 13% growth has trailed the broader market. Despite this, BlackRock’s stock is trading at 20X forward earnings, whereas Goldman stands at 13.2X, providing attractive discounts in comparison to the S&P 500’s 23.6X.

Final Thoughts

Both BlackRock and Goldman Sachs currently hold a Zacks Rank #3 (Hold). The potential for further growth in these investment juggernauts may hinge on post-Q2 earnings estimate revisions. Nonetheless, they remain promising long-term investments, especially with record-breaking assets under management.

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In the Realm of Billionaire Favorites: Unveiling the Top Stocks They Embrace

New Heights for Alphabet Inc.

When billionaires make investment decisions, the world takes notice. It’s more than money; it’s a statement. They choose to lead, not follow, armed with knowledge few possess. Keeping an eye on their investments is a crafty move for everyday investors.

Alphabet Inc. (GOOGL), Amazon.com, Inc. (AMZN), and Microsoft Corporation (MSFT) are among Wall Street’s beloved stocks, hitting record highs recently. These tech giants boast rich histories and a penchant for innovation, attracting the attention of financial elite. Here’s a closer look at why these stocks are adored by the affluent and how retail investors can emulate their strategies.

The Rise of Alphabet

Alphabet Inc. (GOOGL) stands as a tech behemoth, tracing its origins back to 1998 in Mountain View, California. Known as Google’s parent company, Alphabet shines with a market cap of $2.3 trillion, driven by iconic products like Google Search, YouTube, and Android. With a focus on artificial intelligence (AI) since 2016, Alphabet leads the way in AI innovations with Google AI and DeepMind, shaping the digital landscape we inhabit today.

Recently, Alphabet hit a new high of $191.75, marking a series of peak performances. Over the past 52 weeks, GOOGL stock surged by 48.7%, eclipsing the S&P 500 Index’s 25% returns during the same period.

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Moreover, Alphabet declared its first quarterly dividend of $0.20 per share. This move, coupled with a forward yield of 0.42% at current levels, hints at Alphabet’s investor-friendly stance.

Trading at 24.39 times forward earnings, GOOGL stock sits below its five-year average of 25.69x. The company’s recent Q1 earnings exceeded expectations, with revenue climbing by 15.4% annually to $80.5 billion and EPS rising by 61.5% year over year to $1.89.

Analysts anticipate the unveiling of Alphabet’s Q2 earnings after the market closes on Tuesday, July 23, with an expected surge of 27.8% in EPS year over year. Looking into the future, fiscal 2024 EPS is projected to rise by 31.2% annually to $7.61, followed by a 13.1% increase to $8.61 in fiscal 2025.

Billionaires Bullish on Alphabet

In the realm of high-stakes investments, billionaire Daniel Sundheim, heralded as the “LeBron James of investing,” increased his stake in Alphabet by over 20% in fiscal Q1. His hedge fund, D1 Capital Partners, upped its holdings to 2.37 million shares, solidifying GOOGL as the fifth-largest position in D1’s portfolio at 5.5%.

Meanwhile, the legendary investor George Soros, known for his unique investment approach rooted in chaos theory and reflexivity, bolstered his Alphabet holdings by acquiring 271,549 shares in Q1. This move raised his total shares to 1.5 million, accentuating Alphabet’s weight in his portfolio at 3.7%.

Pershing Square’s Bill Ackman also placed his bet on GOOGL, owning 9.4 million Class C shares and 4.4 million Class A shares. Alphabet’s dominance in internet search, expansion into high-growth sectors like Google Cloud, robust revenue growth, and strategic dividends make it a darling among top hedge fund managers.

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With an overall “Strong Buy” rating, GOOGL has analysts’ favor, with 34 recommending “Strong Buy,” three suggesting “Moderate Buy,” and seven opting for “Hold.” The average price target for Alphabet is $198.34, indicating a potential 6.3% upside, while the Street-high target of $225 implies a 20.6% potential gain.

The Ascendancy of Amazon

At Washington-based Amazon.com, Inc. (AMZN), boasting a $2 trillion market cap, the story is one of e-commerce and tech dominance. Founded in 1994, Amazon’s reach extends to entertainment with Prime Video, Amazon Music, Prime Gaming, and Twitch, showcasing its multifaceted prowess. Additionally, Amazon Web Services (AWS) holds sway in enterprise cloud software and AI, underpinning Amazon’s clout across various sectors.

Amazon’s stock is on a relentless upswing, climbing by 43% over the past 52 weeks, with a 26.8% rise year to date, outperforming the broader market. Notably, Amazon hit a new all-time high last week at $201.20.

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Priced at 41.35 times forward earnings, Amazon’s stock trades at a discount to its five-year average of 182.49x.

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