.svg)
Latest Business News
Stocks Poised to Benefit from Weakening US Dollar
Introduction
A recent stock screen from CNBC Pro suggests that a group of stocks, including Advanced Micro Devices (AMD), are set to benefit from the weakening US dollar. When the dollar weakens, American exports become cheaper for overseas buyers, which can result in increased sales and stock price upside for certain companies. In addition, overseas investment in US stocks becomes more favorable when the dollar is down.
Advanced Micro Devices (AMD)
AMD emerged as the top stock on CNBC Pro's screen. During the five largest monthly declines in the dollar over the past five years, AMD gained more than 24% on a median basis. Analysts also predict that the stock will rise another 13% over the next 12 months, based on the consensus price target. However, Wells Fargo remains cautious on the stock in the near term, stating that AMD estimates are elevated heading into earnings season.
First Solar
First Solar also appeared on the list of stocks poised to benefit from a weaker dollar. Over the past five largest monthly dollar declines, the solar firm advanced more than 18% on a median basis. Goldman Sachs anticipates that the company will exceed expectations in bookings as investors prepare for second-quarter earnings.
Nvidia
Nvidia is another company that stands to gain when the dollar weakens. It has already experienced a jump of more than 11% during periods of dollar weakness. However, analysts estimate that there may only be a 4% upside over the next 12 months after its significant rally this year, according to FactSet consensus.
Other Stocks
In addition to AMD, First Solar, and Nvidia, there are other stocks that are also poised to benefit from a weaker US dollar. These include Deere & Company, known for its agricultural equipment, and General Electric, a conglomerate with diverse business segments.
Overall, the weakening of the US dollar presents opportunities for certain stocks. With American exports becoming cheaper and overseas investment in US stocks becoming more favorable, companies like AMD, First Solar, Nvidia, Deere & Company, and General Electric could see further stock price upside in the near future. However, it is important for investors to consider other factors impacting these stocks and to carefully analyze their potential for long-term growth.
A Hot Take on How the Weakening US Dollar May Impact New Businesses
The weakening US dollar presents not only opportunities for existing companies, but also potential advantages for new businesses seeking growth. As the dollar loses strength, it becomes cheaper for overseas buyers to purchase American exports. This can be particularly beneficial for emerging businesses that rely on exporting their products or services.
A weak dollar provides an avenue for new businesses to compete internationally by offering their products at lower prices, making them more attractive to foreign consumers. This can open up new markets and opportunities for expansion, enabling these businesses to gain a competitive edge and establish themselves on a global scale.
Furthermore, the favorable exchange rates resulting from a weaker dollar can encourage foreign investment in US-based startups. Investors from abroad may find it more appealing to allocate funds towards new businesses that are positioned to benefit from the current economic conditions. This infusion of capital can provide much-needed resources for expansion, innovation, and overall growth.
However, new businesses should be mindful of potential challenges that accompany a weaker dollar, such as increased costs for imported raw materials or fluctuating foreign exchange rates. Close attention to managing currency risks and developing effective hedging strategies becomes crucial in order to navigate these potential pitfalls.
In conclusion, the weakening US dollar can present exciting prospects for new businesses. By leveraging the advantages of cheaper exports and increased foreign investment, these businesses have the opportunity to thrive and establish themselves in the global marketplace. Proper risk management and strategic planning will be key for new businesses looking to make the most of this economic trend and achieve long-term success.
Article First Published at: https://www.cnbc.com/2023/07/18/these-stocks-win-when-the-us-dollar-falls-like-its-doing-in-july-.html
