- U.S. jobs report, CPI inflation data, retail sales, and more earnings will be in focus this week.
- Cisco is projected to deliver strong earnings and solid guidance, making it a high-probability winner this week.
- Moderna’s shrinking revenue, expected losses position it for potential downside this week.
Stocks on Wall Street rallied on Friday to record their strongest gain in months, as the closed above the historic 50,000 mark for the first time ever.
Friday’s advance followed three straight days of losses marked by worries about artificial intelligence, with several software companies hit especially hard amid concerns that AI could create more competition.
Source: Investing.com
For the week, the benchmark S&P 500 and tech-heavy lost 0.1% and 1.8% respectively, while the 30-stock Dow rose 2.5%, and the small cap jumped 1.8%.
More volatility could be in store in the coming days as investors assess the outlook for the economy, inflation, interest rates and corporate earnings.
On the economic calendar, delayed retail sales data for December drops on Tuesday. But Wednesday’s delayed release of the U.S. January jobs report could be more pivotal amid fears about the labor market. In addition, January CPI data due Friday will give more indications into whether inflation is truly under control.
Source: Investing.com
Earnings season also continues apace, with several noteworthy reports set to drop, including Coca-Cola, McDonald’s, Ford, , Robinhood, Coinbase, Arista Networks, as well as software stocks such as AppLovin, Shopify, and Datadog.
Regardless of which direction the market goes, below I highlight one stock likely to be in demand and another which could see fresh downside. Remember though, my timeframe is just for the week ahead, Monday, February 9 – Friday, Feb. 13.
Stock To Buy: Cisco
Cisco’s latest earnings report is the key catalyst for the stock this week, and the risk‑reward skew looks favorable. CSCO is scheduled to deliver its fiscal second quarter update after the closing bell on Wednesday at 4:05PM ET.
Expectations aren’t overly stretched, which means a modest revenue and EPS beat, plus stable or slightly upbeat guidance, could be enough to drive a post‑earnings move higher.
Analyst sentiment has been notably positive heading into the print. According to InvestingPro data, 14 of the last 16 EPS revisions have been to the upside, highlighting confidence in Cisco’s continued expansion.
Source: InvestingPro
As a dominant player in networking hardware, security, and increasingly AI infrastructure, Cisco benefits from several trends that can underpin a solid quarter even in a mixed macro backdrop.
Consensus estimates call for Cisco to post adjusted earnings per share of $1.02, up 9% from the year-ago period. Revenue is forecast to increase 8% annually to $15.1 billion, driven by AI demand and robust product sales.
Analysts expect long-term upside from an enterprise market partnership for AI networking products with Nvidia. Cisco’s security business under-performed in fiscal Q1 despite the acquisition of Splunk and analysts will look for a rebound.
Source: Investing.com
Cisco’s stock has been on a tear, hitting a series of fresh 52-week highs in recent sessions. Shares closed at $84.82 on Friday, signaling powerful momentum heading into earnings.
Furthermore, valuation and sentiment work in Cisco’s favor as well. The stock typically trades at a reasonable earnings multiple relative to both broader tech and its own history, and it offers an attractive dividend yield backed by strong free cash flow.
Trade Setup:
- Entry: Around current levels (~$84-85)
- Exit Target: $90-$95 (gain ~5.8%-10.8%)
- Stop-Loss: $80 (risk ~5.8%)
Stock To Sell: Moderna
, by contrast, faces a more challenging week as it prepares to release its Q4 earnings report ahead of Friday’s opening bell at 6:35AM ET. With implied volatility pointing to a +/-16% stock move post-earnings, the risk of a miss looms large.
After its spectacular success during the pandemic with its mRNA COVID‑19 vaccine, the biotech firm has been navigating a difficult transition from one‑product dominance to a broader, but still largely unproven, pipeline.
Analysts have grown increasingly bearish on MRNA ahead of the print, slashing their sales estimates by about 14%.
Source: InvestingPro
Consensus anticipates a significant loss: EPS around -$2.62 on revenue of $662.8 million, down sharply ~30%+ YoY from sales of $966 million.
The biotech company is now facing revenue growth challenges with limited near-term catalysts to offset weakening demand as vaccine sales continue to decline.
At the same time, R&D and manufacturing spending must remain high to support a deep pipeline in respiratory viruses, oncology, and other indications, which puts pressure on near‑term profitability and cash burn.
Source: Investing.com
Moderna’s price has lost steam after a strong recent run, closing at $41.01 on Friday. It’s still up 67.1% over three months and 21.1% in the past month, but last week’s -7% drop suggests fading momentum.
In a market rotating toward growth and AI, high‑beta biotech names like this face rotation risks, especially if results miss or guidance disappoints.
Trade Setup:
- Entry: Around current levels (~$40-41)
- Exit Target: $35 (gain ~15%)
- Stop-Loss: $45 (risk ~12.5%)
Whether you’re a novice investor or a seasoned trader, leveraging InvestingPro can unlock a world of investment opportunities while minimizing risks amid the challenging market backdrop.
Below are the key ways an InvestingPro subscription can enhance your stock market investing performance:
- ProPicks AI: AI-selected stock winners with proven track record.
- InvestingPro Fair Value: Instantly find out if a stock is underpriced or overvalued.
- Advanced Stock Screener: Search for the best stocks based on hundreds of selected filters, and criteria.
- Top Ideas: See what stocks billionaire investors such as Warren Buffett, Michael Burry, and George Soros are buying.
Disclosure: This is not financial advice. Always conduct your own research.
At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the SPDR® S&P 500 ETF, and the Invesco QQQ Trust ETF. I am also long on the Technology Select Sector SPDR ETF. I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies’ financials.
The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.