Why Ferrari might be turbocharged

Today’s the first Monday of a new quarter. If that has you looking at your investment portfolio, Bloomberg Businessweek has a list of stocks that might be worth watching over the coming months. If this newsletter was forwarded to you, click here to sign up.

Following our list of 50 Companies to Watch in January, we’ve compiled 10 names you should know—for better or worse—in the second quarter. Bloomberg Intelligence analysts have identified the most interesting companies from their group of high-confidence Focus Ideas. Spanning sectors and regions, each scenario outlines a catalyst in the next few months that supports our case. Here’s a sample. —Tim Craighead

Illustration: Oscar Bolton Green for Bloomberg Businessweek

Broadcom (Ticker: AVGO): Outlook ☀️
Adoption of custom artificial intelligence chips is increasing, and Broadcom’s specialized “accelerator” semiconductors are far cheaper than rival offerings from Nvidia and AMD for specialized tasks such as customer service chatbots that answer repeated questions. The growing success of the company’s XPU chips and networking gear for data centers should propel surprising sales growth in the next two years.
Trigger: In the second-quarter earnings report in June, updates on sales volumes of AI accelerator chips and networking gear, as well as details on its order backlogs, should validate the AI revenue surprise. —Kunjan Sobhani

Ferrari (Ticker: RACE): Outlook ☀️
The much-anticipated F80 supercar, now starting deliveries, and the all-electric Luce, expected in May, are just two of 20 new models coming from the Italian automaker’s stable in the next three years. Even though its average price has jumped 24% in the past five years, Ferrari remains sold out through 2027, which should turbocharge its profit margin beyond the consensus expectation.
Trigger: First-quarter results due in May should show increased deliveries of the F80, and the same month Ferrari will announce the price of the Luce, giving investors a better sense of potential demand. —Michael Dean

Meituan (Ticker: 3690.HK): Outlook ☁️
China’s largest food delivery company has more than 770 million users but faces increasing competition from Alibaba, Douyin and other AI-savvy businesses. That’s especially true in “instashopping”—which pledges a 30-minute delivery—as well as in nonfood purchases such as travel and hotel bookings. Despite Meituan’s pending acquisition of the DingDong grocery delivery business, its profits look set to disappoint as fees from transactions will be constrained.
Trigger: With rivals expected to reveal aggressive AI growth plans in May, Meituan’s customer traffic and profits risk looking anemic. —Catherine Lim

For the full data sheets and seven other companies to watch (DraftKings, anyone?), read on.

Iran War Headlines

In Brief

• JPMorgan CEO Jamie Dimon said the US needs to “get stronger” to maintain its military and economic might and detailed his bank’s plans to deploy more than $1 trillion to ensure that happens.
• A NASA crew of four astronauts will fly by the moon on Monday at the closest distance they will get to the lunar surface during their mission and the nearest any human has gotten to the moon in more than 50 years.
• San Francisco’s median house price jumped to a record $2.15 million in March, up 18% from a year earlier as wealth generated by artificial intelligence startups flooded the city.

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