Analysis: GameStop is highlighted as the Bull of the Day due to strategic partnerships and potential breakout, while Starbucks is the Bear of the Day facing declining sales and negative earnings growth.

From Nasdaq: 2024-12-26 09:01:00

Zacks Equity Research highlights GameStop as the Bull of the Day and Starbucks as the Bear of the Day. GameStop, a leading video game retailer, faces challenges due to industry digitization, while Starbucks sees declining sales amid health concerns and increased competition. GameStop secures a strategic deal with Microsoft to enhance digital solutions, while Starbucks struggles with negative earnings growth and price weakness.

The “meme stock” craze, led by retail investors on Reddit’s WallStreetBets, propelled GameStop shares to skyrocket by over 6,000%. GameStop’s multiple short squeezes have resulted in a significant cash hoard, allowing the company to make strategic investments. Speculation suggests a potential breakout for GameStop shares, with an 8% short float creating conditions for another short squeeze.

A strategic partnership with Microsoft provides GameStop with enhanced digital solutions, leveraging Microsoft Cloud. Despite the “meme stock” status, GameStop’s collaboration with Microsoft and positive technical chart indicate strong potential for the stock in 2025. Conversely, Starbucks faces declining sales, particularly in North America, China, and internationally, due to waning consumer interest, health concerns, and increased competition.

Starbucks struggles with negative earnings growth and price weakness, reflecting fundamental challenges in the company. The stock has underperformed the market, with concerns about declining consumer interest, health-related issues, and growing competition impacting future prospects. Starbucks faces difficult-to-reverse hurdles in key markets, leading to reduced consumer traffic and declining comparable store sales.

As the Santa Claus Rally begins, investors anticipate a bullish period following historical trends. The rally, spanning the final five trading days of the year and the first two of the New Year, typically signals positive market performance. Market watchers highlight the significance of the Santa Claus Rally in predicting market trends and offer insights on stocks poised for growth during this period.



Read more at Nasdaq: GameStop and Starbucks have been highlighted as Zacks Bull and Bear of the Day