A lot of stocks moved higher last week, but only a handful of them made double-digit percentage moves. Just 54 U.S.-listed stocks with market caps of at least $10 billion saw their shares climb by 10% or better.
Some of last week’s big gainers include Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), Tesla (NASDAQ: TSLA), and Wingstop (NASDAQ: WING). Let’s take a closer look.
Alphabet
It was an uppercase week for Alphabet, when shares of the world’s top dog in search and online advertising soared 12%. The upticks happened primarily on Friday after the tech bellwether posted well-received financial results. It also introduced a dividend, so it’s no longer the most valuable U.S. company by market cap not to declare quarterly distributions.
Revenue rose 15% to $80.5 billion for Google’s parent company through the first three months of this year, just ahead of the 13% that analysts were targeting. A 15% increase may not seem like a lot for a growth stock, but this is actually the fifth consecutive quarter that Alphabet has come through with accelerating top-line growth.
There was double-digit growth across most of Alphabet’s segments, including ad revenue, which accounts for the lion’s share of its business. A big winner was Google Cloud. Revenue soared 28% for the segment, and its operating profit soared nearly fivefold. This is just 12% of the revenue mix at the company, but it’s starting to move the needle.
Image source: Getty Images.
The bottom-line story was even better. Earnings shot 57% higher, roughly double the 29% increase Wall Street pros were expecting. Cost cuts and layoffs aren’t typically good for morale, but investors are applauding the widening margins in the process. This was a blowout performance.
Alphabet had topped analyst profit estimates by 3% to 9% in each of the four previous quarters. This was a 25% beat.
Then we get to the new dividend. Shelling out $0.20 a share every three months translates into a current yield shy of 0.5%. It still opens Alphabet to a new group of institutional and even retail investors with income requirements in their investing decisions.
It’s also not the only way that the tech bellwether is returning money to its shareholders. The board authorized an additional $70 billion in share buybacks.
Tesla
A company can fall short of expectations in an earnings report and still come out winning. Tesla shares rose 14% last week, and unlike Alphabet, it’s not the headline numbers in its first-quarter numbers that awakened the bulls.
Revenue declined 9% for the quarter, and adjusted net income was cut nearly in half. The performance fell short of what the market was expecting on both ends of the income statement. Demand is a problem despite margin-stomping price cuts over the past year, with deliveries down 9%.
The market still bid up the stock on comments made by CEO Elon Musk about the future of its FSD autonomous-driving platform, even as Tesla itself slashed the price of the premium service that helps automate many driving tasks. The company is stepping up its robotaxi efforts and reaffirming plans for a cheaper model that’s coming out soon. This helped squeeze out the shorts, despite the problematic financial performance.
Wingstop
This brings us to Wingstop, the one mover in this piece that ticked higher without a financial update. Shares of the growing chain of small-box eateries specializing in traditional and boneless chicken wings rose 10%, but the company isn’t slated to post its latest quarterly results until Wednesday morning.
It’s easy to see why investors are bidding Wingstop higher ahead of its upcoming earnings release. The past few months have been strong for fast-growing restaurant stocks, and this chain, in particular, has a habit of trouncing expectations. It has posted double-digit percentage beats in each of its last four reports.
The stock is up 49% this year and has nearly doubled over the past year, and expectations are high. However, when you’re consistent — and Wingstop is a chain that has rattled off 20 consecutive years of positive same-store growth — it tends to be a winning recipe for restaurant stocks.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Tesla, and Wingstop. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
