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After witnessing unprecedented growth during the pandemic, videogame publishers are witnessing a reversion to the mean with a reversal to pre-pandemic lifestyles amid macroeconomic uncertainties driven by inflation and increased borrowing costs due to interest-rate hikes.
However, despite the softened demand in the broader industry, incumbents, like Activision Blizzard, Inc (ATVI), have cornered pockets of growth with proven blockbusters such as Call of Duty, World of Warcraft, and Candy Crush commanding a greater share of gamers’ pinched pockets.
The gaming giant looks to merge with Microsoft Corporation (MSFT) this year. It reported record net bookings for the holiday quarter and 2022, exceeding analysts’ expectations.
With continued investment in growing its development teams, robust product pipeline, live game opportunity, and ongoing focus on operational discipline, ATVI seems on course for another year of outperformance.

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ATVI has dipped marginally over the past month to close the last trading session at $76.25. The stock is trading above its 50-day moving average of $76.10 and almost at par with its 200-day moving average of $76.40, indicating an uptrend.

Here is what may help the stock maintain its performance in the near term.
Solid Track Record
Over the past three years, ATVI’s revenue has exhibited a 5.1% CAGR. While the company has increased its net income at a modest 0.2% CAGR, its total assets have grown at 11.3% CAGR over the same time horizon.
Robust Financials
Despite softer demand tied to the weaker macroeconomic environment, ATVI’s net bookings for the fourth quarter of the fiscal, which ended December 31, 2022, increased 43.4% year-over-year to a record $3.57 billion. The company’s total net revenues increased 7.9% year-over-year to $2.33 billion, while its non-GAAP EPS came in at $0.78 during the same period.
ATVI’s total assets came in at $27.38 billion as of December 31, 2022, compared to $25.06 billion as of December 31, 2021.
Favorable Analyst Estimates
As ATVI looks forward to a historic year, in which the company is attempting to complete its acquisition by Microsoft by June 30, 2023, analysts expect the company’s revenue and EPS to increase 11.1% and 11.7% year-over-year to $9.46 billion and $3.81 respectively.
Both revenue and EPS are expected to keep increasing over the next two years to come in at $10.35 billion and $4.39, respectively, for the fiscal ending December 31, 2025.
Premium Valuation
Given its stellar growth prospects, ATVI is trading at a premium compared to its peers. In terms of forward P/E, the stock is trading at 20.02x, 30.9% higher than the industry average of 15.30x.
In terms of the forward EV/EBITDA multiple, ATVI is currently trading at 14.17, which is 65.8% higher than the industry average of 8.55. Likewise, its forward Price/Sales multiple of 6.32 is significantly higher than the industry average of 1.26.
Technical Indicators Look Promising
MarketClub’s Trade Triangles show that ATVI has been trending UP for all the three-time horizons. The long-term trend has been UP since January 6, 2023, while the intermediate-term has been UP since February 15, 2023 and the short-term trend has been UP since March 2, 2023.
Source: MarketClub
The Trade Triangles are our proprietary indicators, comprised of weighted factors that include (but are not necessarily limited to) price change, percentage change, moving averages, and new highs/lows. The Trade Triangles point in the direction of short-term, intermediate, and long-term trends, looking for periods of alignment and, therefore, intense swings in price.

In terms of the Chart Analysis Score, another MarketClub proprietary tool, ATVI scored +100 on a scale from -100 (strong downtrend) to +100 (strong uptrend), indicating that the strong uptrend will likely continue. Traders should protect gains and look for a change in score to suggest a slowdown in momentum.

The Chart Analysis Score measures trend strength and direction based on five different timing thresholds. This tool takes into account intraday price action, new daily, weekly, and monthly highs and lows, and moving averages.
Click here to see the latest Score and Signals for ATVI.
What’s Next for This Stock?
Remember, the markets move fast and things may quickly change for this stocks. Our MarketClub members have access to entry and exit signals so they’ll know when the trends starts to reverse.
Join MarketClub now to see the latest signals and scores, get alerts, and read member-exclusive analysis for over 350K stocks, futures, ETFs, forex pairs and mutual funds.
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Best,The MarketClub Team[email protected]

During the first few trading days of March 2023, we watched the stock market falter, housing demand cool, the 10 Year Treasury Bond rises to a 4% yield, and the 30-year fixed mortgage increase above 7%.
This all came after several hotter-than-expected inflation reports hit investor confidence.
The Federal Reserve has also cut back on its interest rate hikes, going from an increase of 75 basis points to 50 basis points, down to just a 25 basis point increase. Those reduced rate hike increases were due to inflation reports trending in the right direction.
However, reports coming out now show inflation has not yet been tamed after the hikes were slowed. And this is having both big and small investors and some Federal Reserve members calling for faster rate hikes in the future.
David Einhorn, who had a 36% return in his hedge fund in 2022, recently said investors should still be bearish on stocks and bullish on inflation in 2023. Einhorn was short US equities in 2022 and performed very well for his hedge fund investors.

Former Pimco Chief Executive Officer Mohamed A. El-Erian recently wrote in Bloomberg that he favors a 50 basis point rate hike at the coming Fed Meeting. He further noted that three Fed Members have publicly announced their wiliness to increase rate hikes by 50 basis points at coming meetings, despite all agreeing to raise rates by just 25 basis points at the Feb 1st meeting.
Federal Reserve member James Bullard is one of those three Fed members who have come out and announced he favors faster rate hikes in the future. Bullard believes inflation can be beaten in 2023, but only with aggressive rate hikes until it begins to come down. His concern is that inflation doesn’t come down but re-accelerates, and we are forced to relive the 1970s.
With the next Federal Reserve meeting just a few weeks away, now is the time to start planning your portfolio. There is a good possibility that even if rates aren’t increased aggressively at the March meeting, they will be increased multiple times over the coming meetings.
Despite what all the experts say and believe.
At this point, Jerome Powell and the Fed have made it very clear; if inflation persists, they will continue to increase interest rates. How aggressive the Fed will be with rate hikes is a guess at best. But it is pretty clear that rates will continue to climb if we continue to experience high inflation.
With that in mind, let us look at a few Exchange Traded Funds that you can buy to profit from increasing interest rates. You can use these positions for trading or hedges against the rest of your portfolio losing value as the stock market slides due to higher rates.

I like the ProShares Equities for Rising Rates ETF (EQRR), the SPDR S&P Regional Banking ETF (KRE), and the SPDR S&P Insurance ETF (KIE). All three of these ETFs are equity-focused funds that invest in companies that should perform well in a rising interest rate environment.
If you want an investment that is more leveraged to interest rates rising, as in they will perform well if rates rise, look at the next few.
The FolioBeyond Rising Rates ETF (RISR), the Simplify Interest Rate Hedge ETF (PFIX), and the WisdomTree Interest Rate Hedged US Aggregate Bond Fund (AGZD) all invest in options or short bonds. Thus, when interest rates go higher, these funds do well. For example, PFIX was among the top 10 best-performing non-leveraged ETFs in 2022. However, the other side of the coin is also true, and if rates don’t rise or decline, those three funds will not be fun to own.
The most important thing to remember is that the Federal Reserve is basing its rate hike decision on inflation. If inflation comes down, rate hikes will be small and slow. If inflation is persistent and continues to climb, the Fed will likely become more aggressive until inflation is tamed.
Watch the inflation numbers.
Those should tell you whether or not rates are going higher or stabilizing, and thus whether or not you should buy the ETFs mentioned above or begin selling them if you already own them.
Matt ThalmanINO.com ContributorFollow me on Twitter @mthalman5513
Disclosure: This contributor did not hold a position in any investment mentioned above at the time this blog post was published. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

The stock market started the year on a positive note after a year filled with macroeconomic and geopolitical challenges.
The rally was driven by the Federal Reserve’s smallest rate increase since the beginning of the monetary policy tightening in March 2022 and Fed Chair Jerome Powell’s acknowledgment that inflation was showing encouraging signs.
However, investor sentiment has taken a hit lately as minutes from the central bank’s monetary policy meeting indicated that the rate hikes will not end anytime soon. The Fed officials believe interest rates need to increase and stay elevated until inflation reaches 2%.
The officials’ resolve was backed by the 0.6% sequential and 5.4% year-over-year rise in the Personal Consumption Expenditure (PCE) and the hotter-than-expected jobs report. The market expects the Fed to raise the fund rate beyond 5% this year.

However, JPMorgan CEO Jamie Dimon believes a soft landing is “still possible.” Goldman Sachs believes the chances of the American economy slipping into a recession are now just 25%, down from its previous estimate of 35%. Moreover, President Joe Biden recently said he believes the U.S. economy will not fall into a recession this year or next.
Given this backdrop, it could be wise to make the most of the strong uptrend in fundamentally strong stocks, The Hershey Company (HSY), Acuity Brands, Inc. (AYI), and Flowers Foods, Inc. (FLO).
The Hershey Company (HSY)
HSY engages in the manufacture and sale of confectionery products and pantry items. The company operates through three segments: North America Confectionery, North America Salty Snacks, and International.
It offers chocolate and non-chocolate confectionery products; gum and mint refreshment products, including mints, chewing gums, and bubble gums; pantry items, baking ingredients, toppings, beverages, and sundae syrups; and snack items.
On November 10, 2022, HSY announced that it would build a 250,000-square-foot chocolate facility in Hershey, Pa. The facility would support the production capabilities of its popular brands like Reese’s, Kit Kat, and Hershey’s. The expansion would enable the company to meet the fast-growing demand.
In terms of the trailing-12-month levered FCF margin, HSY’s 12.18% is 382.1% higher than the 2.53% industry average. Its 4.99% trailing-12-month Capex/Sales is 56.5% higher than the 3.19% industry average. Likewise, its 0.98x trailing-12-month asset turnover ratio is 16.8% higher than the industry average of 0.84x.
In terms of forward EV/S, HSY’s 4.78x is 188.9% higher than the 1.66x industry average. Its 11.89x forward P/B is 301.8% higher than the 2.96x industry average. Likewise, its 4.37x forward P/S is 278.8% higher than the 1.15x industry average.
For the fiscal fourth quarter ended December 31, 2022, HSY’s net sales increased 14% year-over-year to $2.65 billion. Its non-GAAP gross profit increased 14.6% year-over-year to $1.16 billion. The company’s non-GAAP operating profit rose 16.7% year-over-year to $555.35 million. Also, its non-GAAP net income increased 18.6% year-over-year to $417.11 million.
Analysts expect HSY’s EPS and revenue for the quarter ending March 31, 2023, to increase 5.7% and 8.5% year-over-year to $2.67 and $2.89 billion, respectively. It surpassed Street EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 17.1% to close the last trading session at $239.22.
HSY’s stock is trading above its 50-day and 200-day moving averages of $230.59 and $225.23, respectively, indicating an uptrend.
According to MarketClub’s Trade Triangles, HSY’s long-term trend has been UP since December 8, 2022, while its intermediate-term trend has been UP since February 2, 2023. On the other hand, its short-term trend has been DOWN since February 24, 2023.
Source: MarketClub
The Trade Triangles are our proprietary indicators, comprised of weighted factors that include (but are not necessarily limited to) price change, percentage change, moving averages, and new highs/lows. The Trade Triangles point in the direction of short-term, intermediate, and long-term trends, looking for periods of alignment and, therefore, intense swings in price.
In terms of the Chart Analysis Score, another MarketClub proprietary tool, HSY, scored +75 on a scale from -100 (strong downtrend) to +100 (strong uptrend), indicating short-term weakness. However, it remains in the confines of a long-term uptrend.

The Chart Analysis Score measures trend strength and direction based on five different timing thresholds. This tool takes into account intraday price action, new daily, weekly, and monthly highs and lows, and moving averages.
Click here to see the latest Score and Signals for HSY.
Acuity Brands, Inc. (AYI)
AYI provides lighting and building management solutions worldwide. The company operates through two segments: Acuity Brands Lighting and Lighting Controls (ABL) and the Intelligent Spaces Group (ISG).
In terms of trailing-12-month EBIT margin, AYI’s 12.58% is 30.8% higher than the industry average of 9.62%. Likewise, its 14.87% trailing-12-month EBITDA margin is 12% higher than the industry average of 13.27%. Furthermore, the stock’s 1.16x trailing-12-month asset turnover ratio is 45% higher than the industry average of 0.80x.
In terms of forward non-GAAP P/E, AYI’s 14x is 20.2% lower than the 17.54x industry average. Its 9.91x forward EV/EBITDA is 10% lower than the 11.02x industry average. Likewise, its 10.78x forward EV/EBIT is 29.1% lower than the 15.21x industry average.
AYI’s net sales for the fiscal first quarter that ended November 30, 2022, increased 7.8% year-over-year to $997.90 billion. Its non-GAAP net income increased 6.1% year-over-year to $107.50 million. The company’s non-GAAP operating profit increased 5.3% year-over-year to $140.10 million.
Moreover, its adjusted EBITDA increased 4.1% year-over-year to $153 million, while its non-GAAP EPS came in at $3.29, representing a 15.4% increase from the prior-year quarter.
Analysts expect AYI’s EPS and revenue for the quarter ending February 28, 2023, to increase 6.1% and 5.5% year-over-year to $2.73 and $958.98 million, respectively. It has an impressive earnings surprise history, surpassing the consensus EPS estimates in each of the trailing four quarters. The stock has gained 16.5% year-to-date to close the last trading session at $192.94.
AYI’s stock is trading above its 50-day and 200-day moving averages of $179.85 and $174.05, respectively, indicating an uptrend.Trade Triangles show that AYI has been trending UP for all three-time horizons. The long-term for AYI has been UP since August 16, 2022, while its intermediate-term trend has been up since January 9, 2023, respectively. Its short-term trend has been UP since February 27, 2023.
Source: MarketClub
In terms of the Chart Analysis Score, AYI scored +100 on a scale from -100 (strong downtrend) to +100 (strong uptrend), indicating that the uptrend will likely continue.

Click here to see the latest Score and Signals for AYI.
Flowers Foods, Inc. (FLO)
FLO produces and markets packaged bakery products in the United States. It offers fresh bread, buns, rolls, snack cakes, tortillas, frozen bread, and rolls under the Nature’s Own, Dave’s Killer Bread, Wonder, Canyon Bakehouse, Mrs. Freshley’s, and Tastykake brand names.
On February 20, 2023, FLO announced that it had completed the acquisition of Papa Pita Bakery, a manufacturer and distributor of high-quality bagels, tortillas, breads, buns, English muffins, and flatbreads. Papa Pita Bakery will operate as an independent subsidiary of FLO.
FLO’s President and CEO Ryals McMullian said, “Papa Pita has been an important co-manufacturer of Flowers products for many years, and we expect the acquisition to drive further manufacturing and distribution synergies.”
In terms of the trailing-12-month gross profit margin, FLO’s 47.94% is 51.7% higher than the industry average of 31.61%. Likewise, its 3.67% trailing-12-month levered FCF margin is 45.3% higher than the industry average of 2.53%. Furthermore, the stock’s 1.46x trailing-12-month asset turnover ratio is 75.3% higher than the industry average of 0.84x.
In terms of forward EV/Sales, FLO’s 1.35x is 18.4% lower than the 1.66x industry average. Its 13.30x forward EV/EBITDA is 18.6% higher than the 11.21x industry average. Likewise, its 19.20x forward EV/EBIT is 25.3% higher than the 15.32x industry average.
FLO’s net sales increased 10.1% year-over-year to $1.08 billion for the fourth quarter ended December 31, 2022. Its net cash provided by operating activities rose 136% from the prior-year quarter to $69.36 million.
The company’s adjusted EBITDA increased 8.5% year-over-year to $96.18 million. Also, its adjusted net income increased 14.9% year-over-year to $48.12 million. In addition, its adjusted EPS came in at $0.23, representing an increase of 15% year-over-year.
Analysts expect FLO’s revenue for the quarter ending March 31, 2023, to increase 8% year-over-year to $1.55 billion. Its EPS for fiscal 2024 is expected to increase 9.1% year-over-year to $1.37. It surpassed the consensus EPS estimates in three of the trailing four quarters. Over the past month, the stock has gained 6.1% to close the last trading session at $28.33.

FLO’s stock is trading above its 50-day and 200-day moving averages of $28 and $27.32, respectively, indicating an uptrend.Trade Triangles show that FLO has been trending UP for two of the three-time horizons. FLO’s long-term trend has been UP since October 28, 2022, while its intermediate-term trend has been UP since February 17, 2023. On the other hand, its short-term trend has been DOWN since February 27, 2023.
Source: MarketClub
In terms of the Chart Analysis Score, FLO scored +75 on a scale from -100 (strong downtrend) to +100 (strong uptrend), indicating short-term weakness. However, it remains in the confines of a long-term uptrend.

Click here to see the latest Score and Signals for FLO.
What’s Next for These Stocks?
Remember, the markets move fast and things may quickly change for these stocks. Our MarketClub members have access to entry and exit signals so they’ll know when the trends starts to reverse.
Join MarketClub now to see the latest signals and scores, get alerts, and read member-exclusive analysis for over 350K stocks, futures, ETFs, forex pairs and mutual funds.
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Best,The MarketClub Team[email protected]

It is time to update the crypto charts as I spotted a strong alert in two major coins for you.
It is ironic that the signal comes from the same indicator that accurately predicted the rally of Bitcoin last November when the price was around $16k.
Source: TradingView
Indeed, the main coin has rallied for whopping 52% after the signal topping slightly above $25k. The previous peak of August 2022 at this level unexpectedly acted as a strong barrier that the price couldn’t overcome.

In my recent update last month I warned that “the bullish impulse should not fade until it touches the moving average around $27k to convince the trading community”.
Unfortunately for bulls, the rally has faded below the target. However, the majority of readers did not see this rally as a sign of a global market reversal.
This time, the same RSI indicator doesn’t confirm the most recent peak on the price chart as it shows a lower top. This is called a Bearish Divergence.
The price has already plummeted $2k from the maximum of this month as the signal plays out. The indicator’s reading is on the edge of 50 and further collapse would send more downside pressure on the market. This time the alert appears on the daily chart, though its magnitude could not be as strong as November that occurred on a higher weekly time frame.
The nearest support at $21.3k is located in the valley of this month. After that, there are no significant levels as the price could retest the low of 2022 at $15.5k to reverse all gains of this second leg of pullback.
The top of 2019 at $14k could fortify this support. The round number and psychologically important level of $10k could be the strongest support among those mentioned here.

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Let us move on to the chart of the second largest coin, Ethereum.
Source: TradingView
This time I switched to a Weekly time frame as I spotted another pattern for this coin – in the daily chart it has the same Bearish Divergence on the RSI sub-chart as Bitcoin does.
The combination of rising valleys and falling peaks has shaped a well-known Triangle pattern (orange).
The upside target for the pattern is located at the distance of the widest part of Triangle added to the breakup point at $2,900.

In the middle of the month, the price has failed to pass through the double barrier at $1,750 consisting of purple moving average and the pattern’s upper trendline.
If price fails to crack the resistance, the following drop should break below the downside of the Triangle around $1,200.
The bearish target is located at $60, which means almost total annihilation of Ethereum. This is the second pattern that signals the same target as outlined in my post titled “Crypto Apocalypse?” last May.
That time, the Bearish reversal Head & Shoulders pattern was forming. I added it in pink to the current chart above as a reminder.

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Intelligent trades!
Aibek BurabayevINO.com Contributor
Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

Please enjoy this updated version of weekly commentary from the Reitmeister Total Return newsletter. Steve Reitmeister is the CEO of StockNews.com and Editor of the Reitmeister Total Return.
Click Here to learn more about Reitmeister Total Return

I have been bearish since May 2022. However, I have to admit that the early 2023 evidence did increase the odds of a potential return to a bull market.
That party is over!
Let’s discuss the increasing evidence that bears are ready to come out of hibernation with much more downside to follow. And yes, this will come hand in hand with a trading plan to stay on the right side of action.
Market Commentary
Plain and simple, stocks rallied on a false premise to start 2023.
That being some signs of moderating inflation that could lead the Fed to end their rate hiking regime earlier than expected. This soft landing scenario compelled more investors to believe that bottom was already established and time to bid up stocks for the birth of the next bull market.
The Fed whole heartedly repudiated this idea at the February 1st meeting. They saw inflation as too sticky with no plans to change their hawkish course with higher rates in place through year end.
Bulls were clearly huffing aerosol paint cans at the time because they rallied on the false notion these statements were somehow dovish. The best I can figure out is that because Powell was not pounding the podium and foaming at the mouth that he was somehow dovish.
Clearly not true.
Since then more investors have gotten the memo that the early year rally was premature. Especially after Thursday when the Producer Price Index showed that inflation is much higher than expected.
I saw that event as Strike 3 for bulls as it came on the heels of 2 other events showing inflation being much higher than expected.
Strike 1 was on Friday February 3rd when the monthly jobs report was far too robust. Not just 517K jobs added when only 190K was expected. But even more insipient was the strength of wage increases…which is exactly the kind of sticky inflation Powell warned about just two days prior.
Connected to this event was the subsequent interview of Powell at The Economic Forum in DC. There he was asked what this robust jobs report meant for Fed policies. He could not have been clearer that it makes him even more hawkish.
Specifically, that it likely will compel the Fed to do 2 possible things. First, to push rates higher than the previous expected 5% level. Second, keep those high rates in place longer than the end of the year that was previously stated. And maybe both!
This caused a very momentary sell off in stocks. But bulls took another hit from their aerosol cans in hopes that the 2/14 CPI report would be a Valentines gift to bulls. Unfortunately, it was actually a deadly arrow through the heart with yet more proof that inflation is too hot.
This set the stage for last Thursday’s PPI report. As already shared, that was a devastating Strike 3 for bulls.
We heard that message loud and clear by adding two more inverse ETFs to our portfolio. That was a prudent move as the S&P 500 has slipped -2.9% since the Thursday open. Gladly our 2 inverse ETFs are doing even better at +3.3% and +4.9%.
The curiosity at this point is whether the overall market is truly ready to get back into bear territory. Or are we just exploring the bottom end of the current S&P 500 (SPY) trading range between 4,000 and 4,200???
If bears really are back in charge now, then we would first see an extension of the recent sell off become a break under the 200 day moving average at 3,942. That would sound a FOMO style alarm for many other investors to reverse their misguided bullish notions to now sell, Sell, SELL.
Other notable spots on the way down would be:
3,855 that is 20% down from the all time highs further re-affirming the bear market outlook.
3,491 the October Lows
3,180 represents a 34% decline from the all time highs which represents the average drop for the market during a bear market.
Let’s not get too far ahead of ourselves.
The point being that bulls have taken a few on the chin. They are not down and out…but they are looking quite wobbly.
At this stage we continue to monitor each new economic event to see what it tells us about the health of the economy as well as inflation and future Fed action.
The more these tilt bearish…the sooner we will hit some of those lower targets noted above…and the more money we will make on the way down given the construction of our portfolio for resumption of the bear market.
What To Do Next?
Watch my brand new presentation: “Stock Trading Plan for 2023” covering:

Why 2023 is a “Jekyll & Hyde” year for stocks
How the Bear Market Could Come Back with a Vengeance
9 Trades to Profit Now
2 Trades with 100%+ Upside Potential as New Bull Emerges
And Much More!

Get It Now! Stock Trading Plan for 2023 >
Wishing you a world of investment success!
Steve Reitmeister… but everyone calls me Reity (pronounced “Righty”)CEO, StockNews.com & Editor, Reitmeister Total Return

About the Author
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.

Last year, the automotive industry’s growth was hampered by macroeconomic challenges, including rising interest rates, material inflation, and continued supply chain issues.
Industry estimates of new vehicles sold in the united states in 2022 range from 13.7 million to 13.9 million, representing a decline of roughly 8% to 9% from the 2021 level and the lowest level since 2011.
However, auto industry executives are cautiously optimistic about a rebound in new vehicle sales in 2023. Toyota Motor Corp (TM) expects U.S. auto sales to grow 9% from the previous year to about 15 million this year. Also, S&P Global Mobility and Edmunds project new vehicle sales to be 14.8 million, while Cox Automotive’s preliminary forecast is around 14.1 million.
Moreover, consumer spending remained strong in the first month of 2023. The Commerce Department reported last Wednesday that retail sales grew by 3% in January, exceeding the estimate of a 1.9% increase. A significant jump in auto sales primarily drove the gain in retail sales.

Furthermore, sustained demand for electric vehicles (EVs) should boost the auto industry’s growth. U.S. EV sales leaped by two-thirds over the past year. According to year-end figures released by market research firm Motor Intelligence, automakers sold approximately 807,180 fully electric vehicles (EVs) in the United States in 2022, up 3.2% year-over-year.

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Based on a report by Contrive Datum Insights Pvt Ltd, the global electric vehicle market is projected to reach over $1.10 trillion by 2030, growing at a CAGR of 23.1%.
Given the promising prospects, it could be wise to take advantage of the uptrend in auto stocks General Motors Company (GM), Stellantis N.V. (STLA), and Honda Motor Co., Ltd. (HMC) for outsized returns this year.
General Motors Company (GM)
With a $60.21 billion market cap, GM designs, markets, and sells trucks, cars, and automobile parts worldwide. Additionally, it offers financing and insurance services; and software-enabled services and subscriptions. The company operates through four segments: GM North America; GM International; Cruise; and GM Financial. It markets its vehicles under Buick, Baojun, Chevrolet, and Wuling brand names.
Over the last three years, GM’s revenue and EBITDA have grown at CAGRs of 4.5% and 11.8%, respectively, while the company’s net income has grown at 13.85% CAGR. Also, its EPS and total assets have increased at CAGRs of 10.3% and 19.9%, respectively.
In the fiscal fourth quarter that ended December 31, 2022, GM’s revenue increased 28.4% year-over-year to $43.11 billion. The company’s adjusted EBIT totaled $3.80 billion, up 33.8% year-over-year. Net income attributable to stockholders was $2 billion, an increase of 14.8% year-over-year. In addition, its adjusted EPS grew 57% from the prior-year period to $2.12.
Analysts expect GM’s revenue for the second quarter (ending June 2023) to come in at $40.13 billion, representing an increase of 12.2% year-over-year. Also, the consensus EPS estimate of $1.61 for the next quarter indicates a 41.4% year-over-year increase. Moreover, the company has surpassed the consensus EPS estimates in three of the trailing four quarters.
GM’s trailing-12-month EBITDA margin of 11.37% is 2.5% higher than the industry average of 11.09%. Its trailing-12-month net income margin of 6.34% is 31.7% higher than the 4.81% industry average. Also, the stock’s trailing-12-month ROCE of 13.98% compares to the industry average of 12.47%.
GM is currently trading at a discount to its industry peers. In terms of forward non-GAAP P/E, the stock is trading at 6.99x, 53% lower than the industry average of 14.88x. And its forward EV/Sales of 0.95x is 22.9% lower than the 1.23x industry average. In addition, its forward Price/Sales and Price/Cash Flow of 0.37x and 3.99x compare to the industry averages of 0.96x ad 10.83x, respectively.
The stock is currently trading above its 50-day and 200-day moving averages of $37.64 and $36.96, respectively, indicating an uptrend. It has gained 17.5% over the past month and 12.4% over the past six months to close the last trading session at $43.17.
MarketClub’s Trade Triangles show that GM has been trending UP for all the three-time horizons. The long-term trend for GM has been UP since September 9, 2022, while its intermediate-term and short-term trends have been UP since January 9, 2023, and February 15, 2023, respectively.
Source: MarketClub
The Trade Triangles are our proprietary indicators, comprised of weighted factors that include (but are not necessarily limited to) price change, percentage change, moving averages, and new highs/lows. The Trade Triangles point in the direction of short-term, intermediate, and long-term trends, looking for periods of alignment and, therefore, intense swings in price.
In terms of the Chart Analysis Score, another MarketClub proprietary tool, GM scored +100 on a scale from -100 (strong downtrend) to +100 (strong uptrend), indicating that the strong uptrend will likely continue. Traders should protect gains and look for a change in score to suggest a slowdown in momentum.

The Chart Analysis Score measures trend strength and direction based on five different timing thresholds. This tool takes into account intraday price action, new daily, weekly, and monthly highs and lows, and moving averages.
Click here to see the latest Score and Signals for GM.
Stellantis N.V. (STLA)
Headquartered in Hoofddrop, the Netherlands, STLA designs, engineers, manufactures, and sells automobiles and light commercial vehicles, transmission systems, engines, metallurgical products, and production systems globally.
The company provides its products under the Abarth, Alfa Romeo, Chrysler, DS, Fiat, Jeep, Opel, Lancia, Teksid, and Comau brand names. It has a market capitalization of $55.56 billion.
STLA’s revenue has grown at a CAGR of 30.7% over the last three years. Also, over the same period, its net income and EPS have increased at CAGRs of 69.2% and 12.9%, respectively, while its total assets have grown at 53.7% CAGR.
For the fiscal third quarter ended September 30, 2022, STLA reported net revenues of €42.10 billion ($44.98 billion), a 29% increase year-over-year, primarily reflecting higher volumes, continued strong net pricing, and favorable FX translation effects. Its consolidated shipments of 1,281,000 units, up 13% year-over-year, mainly due to improved semiconductor order fulfillment. Also, global BEV sales grew 41% compared to the third quarter of 2021.
Analysts expect STLA’s revenue for the to-be-reported year (ended December 2022) to come in at $188.58 billion, representing an increase of 9.7% year-over-year. Also, the consensus revenue estimate of $192.53 billion for the current fiscal year 2023 indicates a 2.1% year-over-year increase.
Moreover, the company has topped the consensus revenue estimates in each of the trailing four quarters, which is impressive.
STLA’s trailing-12-month EBIT margin of 11.68% is 46.8% higher than the industry average of 7.96%. And the stock’s trailing-12-month EBITDA and net income margin of 14.21% and 9.33% compare to the industry averages of 11.09% and 4.81%, respectively. Also, its levered FCF margin of 5.99% is 341.6% higher than the 1.36% industry average.
In terms of forward non-GAAP P/E, STLA is currently trading at 3.19x, 78.6% lower than the industry average of 14.88x. The stock’s forward EV/EBITDA of 1.15x is 88.5% lower than the 9.96x industry average. Likewise, its forward Price/Sales of 0.29x is 69.6% lower than the industry average of 0.96x.
STLA has gained 11.6% over the past month and 15.3% over the past six months to close the last trading session at $17.29. The stock is currently trading above its 50-day and 200-day moving averages of $15.34 and $14.08, respectively, indicating an uptrend.
According to MarketClub’s Trade Triangles, STLA has been trending UP for all the three-time horizons. The stock’s long-term and intermediate-term trends have been UP since November 30, 2022, and January 4, 2023, respectively. Moreover, the short-term trend for STLA has been UP since January 26, 2023.
Source: MarketClub
In terms of the Chart Analysis Score, STLA scored +100 on a scale from -100 (strong downtrend) to +100 (strong uptrend). The stock is in a strong uptrend that is likely to continue. As usual, investors should protect gains and look for a change in score to suggest a slowdown in momentum.

Click here to see the latest Score and Signals for STLA.
Honda Motor Co., Ltd. (HMC)
With a $43.17 billion market cap, HMC manufactures and distributes motorcycles, power products, automobiles, and other products in Japan, North America, Europe, Asia, and internationally.
The company operates through four segments: Motorcycle Business; Automobile Business; Financial Services Business; and Life Creation and Businesses. It is headquartered in Tokyo, Japan.
HMC’s EBITDA has grown at a CAGR of 16.9% over the last three years. Also, its net income and EPS have grown at CAGRs of 14.5% and 15.6% over the same period, respectively.
For the fiscal 2023 third quarter ended December 31, 2022, HMC’s revenue increased 20.3% from the year-ago value to ¥4.44 trillion ($33.09 billion). The increase in revenue was driven by higher sales in the motorcycle business and an increase in currency effects. The company’s operating profit was ¥280.40 billion ($2.09 billion), up 22.2% year-over-year, mainly due to profit increase from sales impacts and currency effects.
Also, HMC’s profit before income taxes grew 20.6% from the prior-year quarter to ¥343.50 billion ($2.56 billion). Profit for the period attributable to owners of the parent increased 26.8% year-over-year to ¥244.60 billion ($1.82 billion), while EPS attributable to owners of the parent was ¥144.42, an increase of 32.1% year-over-year.
Analysts expect HMC’s revenue and EPS of $126.60 billion and $3.27 for the current fiscal year (ending March 2023), indicating increases of 374% and 2.3% year-over-year, respectively. Furthermore, the company has surpassed the consensus revenue estimates in three of the trailing four quarters.
HMC’s trailing-12-month EBITDA margin of 13.80% is 24.4% higher than the industry average of 11.09%. Likewise, the stock’s levered FCF margin of 8.41% is 520.3% higher than the 1.36% industry average.

In terms of forward EV/Sales, HMC is currently trading at 0.59x, 52% lower than the industry average of 1.23x. The stock’s forward EV/EBITDA of 7.27x is 27% lower than the 9.96x industry average. Also, its forward Price/Cash Flow of 2.49x compares to the industry average of 10.83x.
The stock has gained 6.3% over the past month to close the last trading session at $25.54. It is currently trading above its 50-day and 200-day moving averages of $24.06 and $24.42, respectively, indicating an uptrend.
MarketClub’s Trade Triangles show that HMC has been trending UP for all the three-time horizons. The long-term trend for HMC has been UP since January 31, 2023, while its intermediate-term and short-term trends have been UP since January 9, 2023, and February 10, 2023, respectively.
Source: MarketClub
In terms of the Chart Analysis Score, HMC scored +100 on a scale from -100 (strong downtrend) to +100 (strong uptrend), indicating that the uptrend is likely to continue. Traders should protect gains and look for a change in score to suggest a slowdown in momentum.

Click here to see the latest Score and Signals for HMC.
What’s Next for These Auto Stocks?
Remember, the markets move fast and things may quickly change for these stocks. Our MarketClub members have access to entry and exit signals so they’ll know when the trends starts to reverse.
Join MarketClub now to see the latest signals and scores, get alerts, and read member-exclusive analysis for over 350K stocks, futures, ETFs, forex pairs and mutual funds.
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Best,The MarketClub Team[email protected]

Almost four years ago, I wrote about the supremacy of palladium over platinum, and we watched the Platinum/Palladium ratio fall below its long-term valley of 0.56 oz.
In contrast, today the Platinum/Palladium ratio is approaching a 4-year high of 0.7 oz, marking a doubling from its all-time low of 0.31 oz established in 2020.
Source: TradingView
On its way up, the ratio broke through a double barrier that included the 2001 valley of 0.56 oz and the horizontal resistance at the top of the range. There are no other barriers for the ratio until it reaches parity between the two metals, which will be a crucial resistance level.

This is because palladium was replaced with the cheaper platinum in the automobile industry due to palladium’s abnormally expensive price.
It is estimated that the platinum substitution of palladium reached 340 koz in 2022, and it is predicted to increase to over 500 koz in 2023, more than twice the amount in 2021.
In other news, the EU has approved a law prohibiting the sale of new petrol and diesel cars that emit carbon from 2035 onwards. The law aims to speed up the transition to electric vehicles. With these factors in play, it seems likely that the two metals will reach parity.
Despite the promising outlook, we should not discount the possibility of the ratio falling back into the 0.31-0.56 oz range if it drops below its previous resistance level.

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Let us move to a daily chart of platinum below.
Source: TradingView
Platinum futures have fallen below the 61.8% Fibonacci retracement level of $919, which is known as the “golden cut” ratio.
If this is viewed as a correction (red down arrow) after an impulsive move (AB segment), then the current level could be an attractive buy point as it’s a common retracement bottom.
The correction has two clear red legs down (1, 2), the last one is longer than the first one.
The RSI indicator is oversold, and there is a small Bullish Divergence as it didn’t make a lower valley with the price.
The blue zigzag represents a potential path for the CD segment, with a target of $1,228, where CD is equal in length to AB. A conservative approach implies waiting for the small correction after an initial minor move up, which shouldn’t break below the most recent low marked as C point.
The $1,117 level will serve as a key resistance point at the B level, while the $797 level will act as crucial support at the A level.
World Platinum Investment Council projects that “this year is forecast to be the second strongest year for industrial platinum demand on record, despite the challenging economic conditions that are prevailing. Indeed, demand is expected to climb ten per cent to 2,316 koz, with a notable increase in demand from the glass industry.”

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Let us get down to palladium futures.
Last October, I posted an update on the palladium futures chart, which showed the metal’s price forming a Bear Flag pattern. I put the old chart below to refresh your memory.
Source: TradingView
Indeed, the Bear Flag played out well, causing the price to drop significantly by more than $600 and breaking below the first support level at $1,560, and approaching the next one at $1,355. I see the latter as a crucial point as you can see in the next monthly chart.
Source: TradingView
Palladium futures show huge volatility in the chart since 2019. We had ups and downs of a strong magnitude that continue with a huge drop.
The large consolidation pattern has continued until the present, with two false upside breaks in the chart.

We may currently be in the last big leg down of a large sideways consolidation that has been ongoing since 2019.
This final leg consists of two smaller parts, with the second part projected to reach 61.8% of the first part when it hits the valley of the initial move down at $1,355. This represents a significant confluence of technical analysis factors.
The retest of that valley would be a good sign that the pattern is complete and could potentially attract buyers. If this scenario plays out, the potential for a bullish reversal is significant. The projected CD segment could reach around $3,700, nearly tripling the current price.
It’s best to wait for a small correction after an initial move up, but make sure it doesn’t break below the most recent low on the chart.
There are three key levels that may serve as resistance for the palladium futures as they move higher.
The first is a minor barrier at the top of the second smaller part of the current downtrend, which is located at $2,360. The second level is the B point at $2,816, which represents a stronger resistance. Finally, the all-time high at $3,425 is expected to be the toughest level to break through.

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Intelligent trades!
Aibek BurabayevINO.com Contributor
Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

While the Gold Miners Index (GDX) started the year sharply in positive territory and raced ahead of the S&P-500 (SPY) despite its rebound to start 2023, the index has retreated all the way into negative territory as of mid-February, giving up considerable gains.
This has led to considerable underperformance vs. the S&P-500 (SPY), and this isn’t overly surprising given that sentiment was becoming overheated short-term in the miners heading into late January.
However, with the index down more than 15% from its highs, it’s time to start building watchlists for potential buying opportunities.
In this update, we’ll look at two small-cap names with world-class deposits aiming to become 250,000 ounce per annum producers post-2025.
Osisko Mining (OBNNF)
Osisko Mining (OBNNF) is a ~$1.0 billion gold developer based on an estimated ~465 million fully diluted shares, and it’s well known for being the proud owner of one of the highest-grade gold projects globally in Northern Quebec, Canada.

This project, known as Windfall, hosts more than 7.0 million ounces of gold at an average grade of 12.0+ grams per tonne gold, and would be one of North America’s highest-grade mines if it were in production today.
Once in production (2026 estimate), the mine is expected to produce upwards of 270,000 ounces of gold per annum at sub $725/oz all-in-sustaining costs, translating to ~61% margins at an $1,875/oz gold price assumption.
(Source: Company Filings, Author’s Chart)
Looking at the chart above to compare Windfall with other undeveloped gold projects, we can see that the project has a much larger production profile than 90% of other undeveloped projects, but its estimated construction costs (~$550 million) are actually well below the average for projects of this size.
Plus, with Osisko sporting a $1.0 billion valuation with over $140 million in cash, the company should have no issue funding this project with a mix of debt and cash on hand.
Today, given that the project is not yet in production nor fully-financed or permitted, the stock trades at a deep discount to fair value, with an estimated NPV (5%) of $1.69 billion when accounting for exploration upside.
However, once in production, mines of this calibre can command valuations of 1.20x P/NAV or greater.
Unfortunately, following a recent financing that the market didn’t expect which led to nearly 10% share dilution, the stock has found itself more than 30% from its recent highs at a share price of US$2.13.
However, based on an NPV (5%) of $1.69 billion and a 1.20x P/NPV multiple, this stock could easily command a valuation of ~$2.03 billion in H2 2025 once it nears its first gold pour, translating to a fair value for the stock of US$4.35 per share (103% upside from current levels).
So, for patient investors interested in more speculative names, I would view any weakness below US$2.05 on Osisko as a buying opportunity.
i-80 Gold (IAUX)
i-80 Gold (IAUX) is a $590 million market cap gold producer that’s focused in Nevada, and it is a spin-out of Premier Gold which was acquired by Equinox Gold in Q4 2021.
Unlike many other gold producers that are sitting within 20% of their September lows after this recent correction, i-80 Gold was one of the few producers to come within a hair of making new all-time highs in Q4 2022, and remains well above its September lows when the GDX bottomed.
This can be attributed to two new discoveries made by the company at two of its four Nevada projects (Granite Creek and Ruby Hill), with the latter being in one of the highest-grade historic polymetallic mining districts near the town of Eureka, Nevada.
So, what is it that makes i-80 Gold so special?
Unlike many gold producers that will struggle to grow production by 25%+ this decade, i-80 Gold has an industry-leading growth profile, set to grow its annual gold-equivalent ounce [GEO] production from ~40,000 ounces in FY2023 to 250,000+ GEOs in FY2026, representing a compound annual growth rate of 84%.
This growth rate dwarfs the low single-digit industry average compound annual growth rate among its peer group (junior and mid-tier producers), and this is just the first phase of growth.
In fact, i-80 Gold has a development pipeline capable of producing 550,000+ GEOs per annum by the end of the decade, and this still doesn’t even include its lower-grade Mineral Point deposit at its Ruby Hill Project.
Historically, the best-performing producers have been those that have steadily grown production at 30%+ per annum given that they have enjoyed consistent cash flow per share growth regardless of whether the gold price cooperated or not.
Some examples include Kirkland Lake Gold (2016-2019) and American Barrick (late 1980s through 1990s), which both enjoyed 500% plus returns in a less than five-year span during the height of their exploration success and production growth (KL actually increased more than 1000% in value).
That does not mean that i-80 Gold has to enjoy similar share-price performance, it certainly helps that it has the same model and that it’s unrivalled among its peer group, meaning that it is the premier pick for those investors looking for growth.
However, while I was previously bullish on the stock based on its new South Pacific Zone discovery at Granite Creek and its polymetallic potential at Ruby Hill, the new Hilltop Zone has proven higher-grade than I expected, and it looks like there could be additional polymetallic zones in the Hilltop corridor.
For those unfamiliar, this 1.5 kilometer corridor (shown below) that extends from the recent discovery to the project boundary received limited exploration testing by previous operators due to it being under alluvial cover (unlike other bonanza-grade polymetallic mines that were operated in the 1870s through 1940s that were under limited cover and uncovered by the old-timers).

(Source: Hilltop Corridor, Ruby Hill Project, i-80 Gold Presentation)
Given the potential for new discoveries and building on existing ones, i-80 has a path to growing net asset value per share, resources per share, and cash flow per share even in a declining gold price environment, which is the holy grail for sector outperformance.
Based on an estimated net asset value of $1.58 billion, a 1.1x P/NAV multiple (high-grade deposits in a top mining jurisdiction) and 316 million fully diluted shares, I see a 2-year target price for i-80 Gold of US$5.00, representing 108% upside from current levels.
Hence, I see the stock as a Strong Buy at US$2.40 after its recent correction, and I plan to accumulate more shares if the stock heads below US$2.20.
Disclosure: I am long IAUX, OBNNF, SPY
Taylor DartINO.com Contributor
Disclaimer: This article is the opinion of the contributor themselves. Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information in this writing. Given the volatility in the precious metals sector, position sizing is critical, so when buying small-cap precious metals stocks, position sizes should be limited to 5% or less of one’s portfolio.

A recent publication from the Kellogg School of Management at Northwestern University discussed the benefits of the post-war reconstruction as a good investment. They use post-World War II as an example of how much money should be spent and how it benefits the war-torn country very quickly.
The paper pointed to specifically The Marshall Plan following World War II. The Marshall Plan had two goals; European economic recovery and the containment of the Soviet Union. Stabilizing Europe’s economies were vital to promoting income growth around the world and entrenching democracies in Europe.
Whenever the Ukraine War is over, I think the Marshall Plan should be adopted identically from what happened 80 years ago since we will essentially be trying to do the same thing in Ukraine as we did all over Europe back then.
However, it will be much more expensive this time around. Post World War II, American leaders sent roughly $130 billion (In 2010 dollars) to help with the European reconstruction of railways, utilities, roads, and airports, the same type of facilities that will need to be rebuilt in Ukraine.

However, economists estimate that restoring the lost infrastructure in Ukraine will cost at least $200 billion, and that figure will climb the longer the war continues. And remember, $200 billion is to rebuild Ukraine.
After World War II, the Marshall Plan not only gave funds to countries that had been friendly to the US during the war but also to Germany and Italy.
The belief back then and now is that not helping to rejuvenate all parties involved after the war ended would only cause more issues later down the road. That has some people thinking that Russia and even Belarus could see new investments from outsiders when the war ends, perhaps not in a straightforward financial manner but in other ways, such as new business opportunities and deals.
At this time, no money has started flowing back into Ukraine to help rebuild the country or increase business and the economy.
But, a deal has already been made between Ukrainian President Volodymr Zelenskyy and BlackRock’s (BLK) CEO Larry Fink that has BlackRock coordinating the investments to help rebuild Ukraine when the war is over.
This means that BlackRock will have a front seat to the show regarding rebuilding Ukraine. We can assume BlackRock will know when, where, and how much money is being spent on different things all throughout Ukraine.
From an investment standpoint, this will possibly give BlackRock a little investment edge. So you could buy either BlackRock stock directly or through a few different Exchange Traded Funds, which helps reduce single-stock exposure risk.
Three ETFs that have the most significant percentage of their assets in BlackRock are the Schwab U.S. Dividend Equity ETF (SCHD), the R3 Global Dividend Growth ETF (GDVD), and the SmartETFs Dividend Builder ETF (DIVS).
Another way you could play the end of the war would be with an ETF that has a decent amount of its assets directly invested in Ukraine.
The FlexShares Morningstar Emerging Markets Factor Tilt Index Fund (TLTE) has most of its assets invested in Ukraine, but it is small at just 0.11%.
The next three ETFs with the most significant amount of their assets invested in Ukraine are the Vanguard FTSE All-World ex-US Small Cap ETF (VSS), the Schwab International Small-Cap Equity ETF (SCHC), and the Vanguard FTSE Europe ETF (VGK). The Ukraine weighting for each of the above funds is 0.03%, 0.03%, and 0.01%.

So you can see that investing directly in ETFs with Ukraine exposure, unfortunately, is currently very difficult since no ETFs now exist that offer direct 100% Ukraine exposure.
However, you could start investing today in Ukraine through any of the options mentioned above or watch and wait for someone to offer a more direct Ukraine ETF in the future.
P.S. Check this page regularly, as I will post in the comments if a Ukraine Focused ETF does emerge. And remember, any reader can always do the same or leave comments about anything mentioned in the article.
Matt ThalmanINO.com ContributorFollow me on Twitter @mthalman5513
Disclosure: This contributor did not hold a position in any investment mentioned above at the time this blog post was published. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

Schools, colleges, corporate boardrooms, and even family dinners are all abuzz with the common topic of conversation: ChatGPT. It would still be an understatement to say that it has taken the world by storm.
The easily accessible chatbot signed up 1 million users in five days and amassed 100 million monthly active users only two months into its launch.
To put this in context, TikTok, the erstwhile fastest-growing app, took nine months to reach 100 million users.
Source: www.cnbc.com
Many users feel that ChatGPT may eventually have the power to disrupt how humans interact with computers and change how information is retrieved. To make things more interesting, its creator, which has launched the chatbot to demonstrate what it is capable of, is just getting started.

We delve deeper to find out what the hype is all about and how investors and traders may stand to benefit from it.
What Is ChatGPT?
In its own description, ChatGPT is “an AI-powered chatbot developed by OpenAI, based on the GPT (Generative Pretrained Transformer) language model. It uses deep learning techniques to generate human-like responses to text inputs in a conversational manner.”
As evident from its own introduction, ChatGPT is a long-form question-answering tool that can produce (surprisingly) human-like responses to user requests. It was developed by San Francisco-based startup OpenAI, which was co-founded in 2015 by Elon Musk and Sam Altman. The startup is well-funded by major investors (more on that later).
What does ChatGPT do?
The chatbot has been programmed to understand human language, curate relevant content from the library of information on which it has been trained, and generate (mostly) appropriate responses to valid questions asked by its user.
As a result, its uses (and abuses) are vast and diverse. The content it can create ranges from poems composed to mirror the style of a poet, written instructions on how to perform a specific task, e-mails, quizzes, listicles, and the list goes on.
ChatGPT has even been used to write reports on popular books and other essay-style assignments for high school and college students.
In one instance, the chatbot has even passed an MBA exam given by a Wharton professor.
As students in classrooms have used ChatGPT to generate entire essays and hackers have begun testing it to create malware, concerns regarding its potential misuse and ethical boundaries have been gathering momentum.
Why is the technology behind ChatGPT important?
ChatGPT is one of the several use cases of generative AI, the subset of algorithms that creates and returns content, such as human-like text, images, and videos, based on the user’s written instructions (prompts).
Prior examples include Dall-E, a text-to-image program from OpenAI that gained recognition for its ability to come up with realistic, often absurd, pictures that match text descriptions provided to it.
ChatGPT is powered by a large language model or LLM. This gives the application the ability to understand human language and provide responses based on the large body of information on which the model has been trained.
Of late, LLMs have been used in autocomplete kind of applications to predict the next word in a series of words in a sentence. However, GPT-3.5, the LLM behind ChatGPT, enables it to take the quantum leap by predicting the next sentence. This allows the program to write paragraphs and entire pages of content.
GPT-3.5 is an upgrade of OpenAI’s GPT-3 language model, which has 175 billion parameters and was trained on 570 gigabytes of text, more than 100 times the 1.5 billion parameters that were used to train its predecessor, GPT-2.
This gargantuan upscaling of input has completely revolutionized its behavior. GPT-3 is able to perform tasks on which it has received little to no explicit training, at times even better than its specifically-trained counterparts.
Moreover, its transformer-based architecture allows it to process large amounts of data in parallel. This differentiates ChatGPT by giving it the ability to draw upon users’ earlier message in the thread and use it in a different context to form responses later in the conversation.
As lines between human and artificial intellectual capacities blur with the upcoming iterations of GPT and humankind’s pursuit of Artificial General Intelligence, in the foreseeable future (if it’s not already here), it might be impossible to discern whether such an article was composed with or without human intervention.
What is AI investing?
Artificial Intelligence (AI) is an umbrella term used to denote a series of programs and algorithms designed to mimic human intelligence and perform cognitive tasks efficiently with little-to-no human intervention.
Reinforcement through Machine Learning (ML) changes the game by enabling the models and algorithms to keep evolving to improve based on outcomes.
Unlike bubbles that usually tend to mushroom around obscure delusions, such as tulips and crypto, AI is a general-purpose technology that has already touched and improved all facets of our life.
With the potential to be as revolutionary as the steam engine and electricity, AI already influences how we shop, drive, date, entertain ourselves, manage our finances, take care of our health, and much more.
Given its massive importance, it’s hardly surprising that Zion Market Research forecasts the global AI industry to grow to $422.37 billion by 2028. Hence, this field has understandably garnered massive attention from investors who are reluctant to miss the bus on such a watershed development in the history of humankind.
Although OpenAI, the creator of ChatGPT, is not a publicly listed company, Microsoft Corporation (MSFT) is betting big on the company with the announcement of a multiyear, multibillion-dollar investment deal.
At the World Economic Forum held in Davos this year, CEO Satya Nadella discussed how the underlying technology would eventually be ubiquitous across MSFT’s products. The process has already begun with updates to its Bing search engine.

MSFT’s rival, Alphabet Inc. (GOOGL), is in hot pursuit. With AI-enabled technology ubiquitous across its platforms, the company has unveiled its own response to ChatGPT, called BardAI, with which the company is eager to reclaim its reputation as an early bird in the domain of conversational AI.
Chinese tech giant Baidu, Inc. (BIDU) has also followed suit with Ernie Bot.
Amazon.com, Inc. (AMZN) and Meta Platforms, Inc. (META) are also among the notable players in this dynamic domain.
What’s Next for AI investing?
Remember, the markets move fast and things may quickly change for these stocks. Our MarketClub members have access to entry and exit signals so they’ll know when the trend starts to reverse.
Join MarketClub now to see the latest signals and scores, get alerts, and read member-exclusive analysis for over 350K stocks, futures, ETFs, forex pairs and mutual funds.
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Best,The MarketClub Team[email protected]