Top US stocks: Alphabet, Acceleron and Tesla

Alphabet fights back against the record fine handed down by the EU, Acceleron Pharma hunts for a buyer willing to pay a big premium, Tesla to see most intense week of deliveries yet, Amazon moves into the UK insurance market, and Polestar finds a SPAC to take it public.

USA (1)

Alphabet

Alphabet has criticised regulators in the EU for ignoring the significant competition between its Android operating system and Apple’s iOS as it tries to overturn a record $5.1 billion fine.

Alphabet was issued the record fine back in 2018 after the EU found it had used its Android operating system to dominate the market and prevent competition since 2011. Speaking to a panel at the start of a five-day hearing, Alphabet’s lawyer said the European Commission had ‘shut its eyes to the real competitive dynamic in this industry, that between Apple and Android’.

Meanwhile, separate reports from CNBC said the Google Cloud Platform has slashed the commission it collects on third-party software sales to just 3% from 20% beforehand, citing an unnamed source.  

Acceleron Pharma

Acceleron Pharma is in talks about being acquired by a large pharmaceutical firm for over $11 billion, according to reports from Bloomberg on Friday.

The report did not reveal the identity of the potential buyer, but said the likes of Bristol-Myers Squibb, which owns 11.5% of Acceleron, could be regarded as a potential suitor. The deal being discussed would value Acceleron at around $180 per share.

Acceleron shares have risen by almost 30% since the start of this month and currently trades at a record high of $167.65 before the opening bell today. The report said no deal was guaranteed and that Acceleron could remain as a standalone company.

Tesla

Tesla is in play today amid reports that this week will be the busiest on record in terms of deliveries.

Reports surfaced over the weekend that CEO Elon Musk had sent an email to staff stating this will be the company’s ‘most intense delivery week ever’. That was followed by reports from Reuters that Tesla’s factory in Shanghai in China is set to produce 300,000 cars during the first nine months of this year. Tesla exports the majority of its China-made cars but also sells them domestically.

Separately, Tesla has released a new software update that allows customers to gain access to its Full Self Driving beta software, but only to those that achieve a high enough safety score.

Amazon

Amazon is set to start offering insurance to small and medium-sized businesses in the UK, according to broker Superscript.

Reuters reported that members of Amazon’s Business Prime plan will be able to buy the likes of contents, cyber and personal indemnity insurance from Superscript, citing a company spokesperson. They will be offered a 20% discount to encourage them to take out policies.

Amazon partnered up with Next Insurance to offer insurance to SMEs in the US earlier this year. It comes as more non-traditional businesses move into the insurance space, threatening the position of large financial institutions that traditionally supply cover.

Polestar and Gores Guggenheim

Polestar, the electric vehicle firm owned by Geely and Volvo, is planning to go public in the US by merging with blank-cheque outfit Gores Guggenheim, according to reports from Reuters.

The company is reported to be eyeing a valuation of around $20 billion including debt. A firm announcement could be made this week. The company already produces the Polestar 1 and Polestar 2 and raised $550 million in funding last April to help fund development of the Polestar 3, which it plans to produce in the US rather than in China, where all of its cars are currently made.

Oil stocks

Oil stocks were leading the charge in pre-market moves today, spurred higher as crude oil prices surge higher thanks to increasing demand twinned with limited supplies.

Exxon Mobil and Chevron were among the biggest gainers before the opening bell today as crude oil prices edged toward $80 per barrel. Notably, Goldman Sachs said it now expects oil prices to hit $90 per barrel by the end of the year, up from its previous $80 target on expectations that demand for fuel will recover faster than previously expected while supplies will continue to be affected by the aftermath of Hurricane Ida.

Industrial stocks like 3M and Caterpillar were also trading higher before the bell today.

Analyst Recommendations: Box, Chewy and Altice USA

Box was upgraded to Market Outperform from Market Perform by JMP Securities, which said the cloud computing firm was executing its strategy well.

Credit Suisse initiated coverage on online pet food store Chewy with a Neutral rating and a target price of $121, considerably higher than its current share price that sits just below $70 on the belief it can keep up its rapid rate of growth.

Altice USA was downgraded to Neutral from Outperform by Credit Suisse, prompted by the broker’s belief that it will see a short-term negative impact from its buildout of its fibre lines.

Best Buy was named a ‘top idea’ by Piper Sandler, which has a positive view on the company’s new Best Buy Total Tech membership plan.

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