Hot Stocks: AI stocks surge; LSI takeover bid; NSSC sets 52-week high; PLCE declines
The major U.S. equity averages declined again on Monday, led by a 1% drop in the Nasdaq. Stocks were carried lower by continued momentum from Friday, when a stronger-than-expected employment report stirred fears that the Federal Reserve would need to persist in its hawkish stance longer than expected.
While the overall market pushed lower, artificial intelligence stocks remained a bright spot. With the recent headlines about the industry fueling retail interest in the group, C3.ai (NYSE:AI) registered its fifth consecutive day of gains. BigBear.ai (BBAI) and SoundHound AI (SOUN) surged as well.
Looking at individual stocks, Life Storage (LSI) posted a double-digit percentage advance after receiving a hostile takeover offer from Public Storage (PSA). Meanwhile, earnings news sent NAPCO Security (NSSC) to a new 52-week high.
On the downside, The Children’s Place (PLCE) slumped after releasing a disappointing forecast.
Sector In Focus
Ongoing interest in artificial intelligence sparked further gains in stocks tied to the industry. This included C3.ai (AI), which extended its recent gains with an advance of more than 6%.
This marked the fifth consecutive day of gains for C3.ai (AI) and the 10th higher finish in the past 12 sessions. The upswing included a rally of 18% on Friday, when D.A. Davidson initiated coverage of the stock with a Buy rating, characterizing the company as a “truly scarce asset.”
Monday’s surge allowed AI to set a new intraday 52-week high of $30.92. Overall, the stock has soared almost 150% so far in 2023.
The latest upswing also carried other names in the sector higher. BigBear.ai (BBAI) jumped almost 18% on Monday, while SoundHound AI (SOUN) skyrocketed by 43%.
Standout Gainer
Life Storage (LSI) received a boost after receiving an unsolicited takeover bid from rival Public Storage (PSA). The advance took the stock higher by more than 11%.
Under the proposed deal, each LSI share would be exchanged for 0.4192 of a share of PSA. This equated to a takeover price of $129 per share, valuing the possible transaction at $11B.
On the news, LSI surged $12.47 to close at $123.05. This added to an upswing that started in early January. The stock has climbed 28% so far in 2023, reaching its highest close since September.
Standout Decliner
While the stock significantly trimmed its initial losses, The Children’s Place (PLCE) slumped after releasing weak preliminary Q4 results. The stock eventually finished lower by 4%.
The children’s clothing retailer said Q4 net sales would total between $454M and $456M. Analysts were looking for a figure of around $468M. The company blamed the disappointing forecast on a challenging macroeconomic environment.
Following the guidance, PLCE posted an early loss of 14%. Shares rebounded in the middle of the day but still ended lower at $1.91. This led to a closing mark of $44.75.
Monday’s drop retraced a portion of the gains the stock has made over the past month. Last Thursday, PLCE recorded its highest close since August. Even with the slide, the stock remains about 26% higher for 2023 so far.
Notable New High
NAPCO Security (NSSC) rode stronger-than-expected financial figures to a new 52-week high, with the stock surging 10%.
The maker of security products reported Q2 non-GAAP EPS of $0.28, topping projections by more than 85%. Revenue jumped 27%, also exceeding estimates. Adjusted EBITDA more than tripled from last year to reach $10.3M.
Based on the earnings news, NSSC surged to an intraday 52-week high of $36.78. The stock walked back some of the gains later in the session but still finished at $34.37, an advance of $3.23 on the day.
The rally added to a recent upswing. Shares have climbed 25% in the past month and more than 77% for the past year.
For more of the day’s best- and worst-performing stocks, head over to Seeking Alpha’s On The Move section.
