From Nasdaq: 2025-03-05 17:27:00

Today’s Zacks Research Daily highlights new reports on major stocks like NVIDIA Corp. (NVDA), Tesla, Inc. (TSLA), and American Express Co. (AXP). NVIDIA benefits from AI growth, while Tesla faces challenges from pricing and competition. American Express sees revenue growth from new products, but increased expenses are a concern. CSP Inc. (CSPI) and NetSol Technologies, Inc. (NTWK) face risks but also show potential for growth. Tesla’s stock has outperformed the Zacks Automotive – Domestic industry. The company’s electric vehicle business is under pressure from pricing challenges and fierce competition, with 2024 marking its first-ever annual delivery decline. CEO Musk’s divided attention and growing political controversies have investors questioning whether Tesla is still his top priority. Tesla expects operating expenses to rise this year, squeezing profitability. However, Tesla’s long-term growth prospects still remain strong, driven by its thriving Energy Generation & Storage segment, expansive Supercharger network and AI advancements. Tesla’s robust balance sheet, with a high liquidity buffer, supports continued innovation and expansion. Progress in the autonomous vehicle domain, including plans to launch robotaxi services in 2025 bode well. Thus, investors should retain Tesla stock for now. American Express’ shares have outperformed the Zacks Financial – Miscellaneous Services industry over the past year (+44.7% vs. +6.7%). The company’s growth initiatives, like launching new products, reaching new agreements and forging alliances, are boosting its revenues. Consumer spending on travel and entertainment, which carries higher margins for AmEx, is advancing well. American Express’ focus on Millennials and Gen-Z consumers, who exhibit strong dining preferences, will position the company for long-term growth. Its solid cash-generation abilities enable the pursuit of business investments. However, with higher utilization of its cards, costs in the form of card member services and card member rewards are likely to go up. Its current debt level induces an increase in interest expenses. Provisions for credit losses have been increasing due to higher net write-offs. As such, the stock warrants a cautious stance. Shares of CSP have underperformed the Zacks Computer – Integrated Systems industry over the past year (-18.9% vs. -17.6%). This microcap company with a market capitalization of $150.68 million is facing risks which include weak growth in the high-performance products segment, dependence on low-margin IT solutions, and continued operating losses despite revenue growth. High stock-based compensation, customer concentration risks, and limited international reach add uncertainty. Investors must weigh CSP’s cybersecurity potential against its ongoing profitability challenges. Nevertheless, CSP is transitioning toward high-margin, recurring revenue streams, driven by strong service revenue growth and increased demand for its cybersecurity solutions. The company’s AZT PROTECT platform is gaining traction in critical infrastructure sectors, supported by key partnerships and a growing patent portfolio. A strong balance sheet with no long-term debt enables strategic investments, while its alliance with Rockwell Automation accelerates market expansion. NetSol Technologies’ shares have underperformed the Zacks Computer – Software industry over the past year (-8.7% vs. +1.3%). This microcap company with a market capitalization of $28.71 million has seen license fee revenues plummeted 97.6% year over year, and rising operating expenses ($7.41 million, +20.5%) pressured profitability. Net loss reached $1.15 million due to FX volatility, and revenue from key client Daimler fell 23%. Trade risks, competitive pressures, and uncertain ROI on growth investments remain concerns. As such, the stock warrants a cautious stance. Nevertheless, NetSol is transitioning to a subscription-based model, enhancing revenue stability. In the second quarter of fiscal 2025, subscription and support revenues grew 27% year over year to $8.6 million (55.6% of total revenues). Strong customer relationships with BMW and Kubota drive long-term revenue visibility, while North American expansion diversifies income streams. AI-driven product enhancements improve efficiency, and a solid cash position ($21.3 million) supports growth.



Read more at Nasdaq: Top Stock Reports for NVIDIA, Tesla & American Express