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Shares of MP Materials (MP 8.69%) rallied on Friday, up 13% as of 12:53 p.m. ET.

MP Materials has become a highly strategic company in the U.S., especially after July, when the U.S. Department of Defense directly invested $400 million in the rare-earth elements miner, while also committing to purchasing future output at certain price floors.

Rare-earth elements are critical materials used in a variety of industrial and military electronics applications, so MP Materials has since moved higher whenever geopolitical tensions rise and the subject of critical materials comes to the forefront.

That’s what happened today.

Image source: Getty Images.

Trump threatens China over new rare-earth elements restrictions

On Friday, President Trump took to his social media platform, Truth Social, to excoriate China. President Trump threatened to greatly increase the already-substantial tariffs on Chinese imports into the U.S., and even threatened to cancel his upcoming meeting with President Xi Jinping.

The bellicose reaction came as a response to China apparently instituting new export controls on rare-earth elements yesterday. On Thursday, the Chinese Ministry of Commerce said foreign countries must obtain a license to export rare-earth products sourced from China. Of note, China controls roughly 70% of global rare-earth products, especially on the refining side, so this move threatened to cut off or slow these supplies to the rest of the world.

The new tensions were a disappointing step backward from the ongoing trade talks that investors hoped were improving since April’s “Liberation Day” salvo.

Still, certain stocks benefit from geopolitical tensions, and MP Materials — along with other miners of critical minerals — rallied today in response to the back and forth. If rare-earth element imports are delayed or cut off, MP Materials’ U.S.-based rare-earth mining operations would only see that much more demand.

Plays on geopolitical tensions have rallied this year

Strategic U.S. assets, whether in rare-earth elements, uranium, semiconductors, or others, as well as the price of gold, have risen this year. This has been due to the increasingly protectionist stance of the U.S. government, and the increasing inflationary pressure resulting from U.S. attempts to wean itself off cheaper foreign materials and goods to become more self-sufficient.

These trends don’t appear to be slowing down any time soon, so while many of these stocks are up a lot and trade at very high valuations, it may be prudent for investors to secure some “strategic” U.S. companies as part of their diversified portfolios today.

Shares of EchoStar (SATS -2.14%) rallied another 23.6% in September, according to data from S&P Global Market Intelligence.

EchoStar’s rally was all the more notable, given that EchoStar had already rallied nearly 90% in the prior month, when it managed to sell a big slug of its wireless spectrum at prices much higher than the market had anticipated.

September saw a repeat occurrence, with EchoStar selling even more of its wireless spectrum assets, bringing in even more cash, as well as shares of Elon Musk’s SpaceX. Management also gave a presentation regarding what it has done with all the cash, as well as its operational plan going forward.

EchoStar unloads more spectrum to SpaceX, with even more to go

Early in September, EchoStar announced it had agreed to sell another $17 billion worth of wireless spectrum to Elon Musk’s SpaceX. That deal followed EchoStar’s blockbuster $23 billion sale of wireless spectrum to AT&T (T 1.02%) in August.

Unlike the all-cash AT&T sale, the SpaceX sale was split between $8.5 billion in cash and $8.5 billion in SpaceX stock. The AT&T sale had essentially been enough to wipe out all of EchoStar’s debt, so a cash infusion wasn’t necessarily needed.

Meanwhile, EchoStar is now a SpaceX shareholder, which, though private, appears to be an exciting growth company that should serve the space economy for decades to come. That may be a refreshing “upside” play for EchoStar shareholders, whose main other businesses are the declining DISH TV satellite TV and broadband, as well as the low-growth Boost Mobile wireless service.

In a mid-month presentation, EchoStar management said that it will immediately pay down $11.4 billion in debt right away, taking out its highest-yielding notes that go up to an 11.75% yield. That should greatly lower the company’s interest expense, while leaving EchoStar with $24.1 billion in cash against just $13.4 billion in debt after the debt paydown. In addition, EchoStar will have its $8.5 billion stake in SpaceX also on the balance sheet.

EchoStar also still had about 45 MHz of spectrum remaining at the end of the month, down from the 140 MHz or so before the AT&T deal. On the last day of September, Bloomberg reported Verizon (VZ -0.01%) was interested in the remaining spectrum still held by EchoStar. That caused another jump in the stock, capping another great month for shareholders.

Image source: Getty Images.

Could EchoStar still be cheap?

EchoStar’s market cap has risen to about $21.6 billion. While that is a lot higher than early in the year, EchoStar now has $10.7 billion in net cash, along with $8.5 billion in SpaceX shares, and some extra spectrum of unknown market value.

That means the remaining “legacy” businesses are only valued at $2.4 billion — even valuing the remaining spectrum at zero. And while the remaining businesses technically are “losing” money, they have made $15.5 billion in revenue over the past 12 months. Meanwhile, the retirement of EchoStar’s debt should relieve lots of interest expense and could also enable lower capital spending.

EchoStar chairman and co-founder Charlie Ergen is a savvy operator, as evidenced by his purchase of wireless spectrum that later turned out to be very valuable. It wouldn’t be crazy to assume that he and his team will create more value going forward with the greater financial flexibility they have to work with today.

Shares of database and cloud giant Oracle (ORCL -0.47%) rallied 24.4% in September, according to data from S&P Global Market Intelligence.

Oracle named two new co-CEOs to succeed current CEO Safra Katz, and the Donald Trump Administration also gave its approval to the general terms for Oracle to acquire part of TikTok U.S., and to also manage the app.

Normally, those would have been fairly consequential events, but they weren’t really the reason for Oracle’s September rise. While the CEO change was significant, Chairman Larry Ellison is still heavily involved in Oracle’s operations and strategy.

Rather, the main event was Oracle’s second quarter earnings call Sept. 9, when the company disclosed an absolutely massive increase in its cloud unit’s remaining performance obligations (RPO). That sent Oracle’s stock up nearly 40% the following day — an astonishing rally for a company of that size — before the stock settled back into a 24.4% gain.

Image source: Getty Images.

Oracle’s RPO goes parabolic

Interestingly, when Oracle reported first fiscal quarter earnings, it missed expectations on both the top and bottom lines, with revenue growing a solid-but-not-spectacular 12.3%.

But of course, it wasn’t the prior quarter but rather the future that got investors incredibly excited. To that end, Oracle recorded a massive 359% increase in its cloud unit’s remaining performance obligations (RPO), which is contracted capacity to be used in future years.

It was subsequently reported the massive growth was due to OpenAI, which signed a $300 billion agreement to rent AI compute capacity from Oracle for five years starting in 2027.

OpenAI is the creator of ChatGPT, the first mover in AI large language models. So while the massive increase in Oracle’s RPO was great to see, some might have been skeptical about where the money-losing OpenAI would find all the cash needed to fulfill the contract.

The question was partially answered later in the month, when Nvidia (NVDA 1.25%) and OpenAI agreed to a long-term funding agreement. Under that agreement, Nvidia will invest up to $100 billion in OpenAI in order to fund 10 gigawatts of data centers, with the first tranche set to come online in late 2026.

So, it appears that Nvidia will help OpenAI pay for its massive new cloud contract with Oracle, which likely alleviated at least some of the potential funding concerns for Oracle’s RPO.

Can the Oracle-OpenAI-Nvidia trio take on the rest of the Magnificent Seven?

The artificial intelligence wars are heating up, with the major cloud computing companies in the Magnificent Seven spending tens of billions or even $100 billion-plus this year to win the AI race, and perhaps even achieve artificial general intelligence.

Coming into the month, Oracle was an AI player, though not one of the biggest as a distant fourth-place cloud provider. OpenAI, the first mover in LLMs, is still a startup, growing fast but still losing billions every year. And while Nvidia dominates in AI GPUs today, all the big clouds are also developing their own custom AI chips.

So these three players, which all have strengths but lack the all-in-one breadth of the leading cloud infrastructure players, appeared to team up in September. It will be very interesting to see if the three-way alliance can outpace the rest of the cloud giants in the AI races, which should get very interesting through the rest of this decade.

Shares of Alibaba (BABA 4.26%) are rallying again today, up as much as 5.5% before settling into a 4.4% gain as of 12:34 p.m. ET.

Alibaba held a big cloud event last week, giving a bullish outlook and raising its cloud spending forecast above its prior target of $53 billion over three years. Apparently, the outlook was encouraging enough for several Wall Street analysts to significantly raise their price targets on shares to start the week.

Morgan Stanley and Jefferies up their BABA targets

On Monday, analysts at Wall Street banks Morgan Stanley and Jefferies raised their price targets on Alibaba. Morgan Stanley’s Alibaba analyst team raised its target from $165 to $200, largely on the back of increased cloud computing growth. The analysts now actually see cloud growth accelerating 32% in fiscal 2026 and 40% in 2027. For reference, last quarter Alibaba grew its cloud revenue 26%, which was already an accelerating figure.

Obviously, generative AI is sparking huge new demand for Alibaba’s cloud services and models, with the Morgan Stanley analysts projecting the number of tokens doubling every two to three months. An AI token is a word or part of a word in an AI prompt or response that acts as essentially a “unit” of AI processing.

Meanwhile, investment bank Jefferies raised its price target from $178 to $230. The analysts cited “remarkable” progress on Alibaba building out AI infrastructure, innovating with its Qwen series of models, and developing useful software agents.

Image source: Getty Images.

Alibaba is still cheaper than the “Magnificent Seven”

Alibaba’s stock has rallied 113% this year in a remarkable AI-fueled turnaround. However, shares only trade at 20.7 times earnings, which is still cheaper than the large U.S.-based tech giants.

There are certainly risks to investing in China; however, it appears the government is now more supportive of the tech sector than the hostile posture it took back in 2021-2022. As such, it’s no surprise to see the country’s tech leaders doing much better today.

Shares of APA (APA 3.02%) rallied 4.1% on Wednesday as of 1:30 p.m. ET, continuing a second straight day of gains for oil stocks.

As was the case yesterday, oil prices leapt higher, albeit off of a low price, as tensions between NATO countries and Russia ratcheted up once again. But this time, the source of increased tensions came from President Donald Trump, in an unexpected reversal from his prior conciliatory tone toward Russia.

Trump gives his blessing to NATO strikes and Ukraine retaking territory

Yesterday, President Trump wrote on Truth Social that:

After getting to know and fully understand the Ukraine/Russia Military and Economic situation and, after seeing the Economic trouble it is causing Russia, I think Ukraine, with the support of the European Union, is in a position to fight and WIN all of Ukraine back in its original form.

The comments reveal a significant about-face for the president, who seemed to be more sympathetic to Russia than Ukraine at the beginning of his term. But it now seems the president is taking an adversarial tone with Russia, which could have implications for oil markets.

In a separate Truth Social post, Trump also advocated for Europe to cease all energy purchases from Russia, noting:

In the event that Russia is not ready to make a deal to end the war, then the United States is fully prepared to impose a very strong round of powerful tariffs… But for those tariffs to be effective, European nations would have to join us in adopting the exact same measures… they have to immediately cease ALL energy purchases from Russia.

Tariffs or sanctions on Russian oil or countries that buy Russian oil could have the effect of lowering supply, which could shoot prices higher, given that Russia accounts for about 10% of all global oil supply. Russia also sells lots of natural gas to Europe, so curtailing that could also boost international natural gas prices as well.

APA is a large upstream oil and gas company with operations outside of Russia, in the U.S., South America, the U.K., and Egypt. So, its production stands to benefit from higher prices if Russia supply is curtailed, either by sanctions or due to Ukraine’s new attacks on Russia storage depots.

Image source: Getty Images.

Think of traditional energy as a dividend-paying hedge

Oil price shocks usually come from geopolitical conflicts, which have the potential to harm the economy — and many of your stocks along with it. However, traditional energy stocks in oil and natural gas can benefit from those shocks, as we saw in 2022. Therefore, APA and its peers can act as a hedge against geopolitical conflict, while the stock also pays out a 4.2% dividend yield in the meantime.

Shares of UiPath (PATH 10.83%) rallied on Monday, with shares up 10.5% as of 3 p.m. ET.

UiPAth received a positive sell-side analyst note today, and was discussed extensively on Reddit message board Wall Street Bets (WSB) over the weekend. The combination sent UiPath shares rising, given that shares still trade some 85% below their 2021 all-time high.

Truist gives a thumbs-up, but WSB takes it from there

On Monday, Truist Financial analyst Terry Tillman wrote a note saying he came away “increasingly confident” in UiPath being able to meet or exceed its full-year outlook given on its recent earnings release, following a meeting last week with the company’s CFO, chief operating officer, and investor relations team. That being said, Tillman didn’t change his price target on the stock, leaving it at $12 per share and giving UiPath a hold rating.

While the commentary on full-year guidance is nice, the note by itself probably wasn’t enough to get the stock moving as much as it did today. Likely, the extra boost was provided by meme stock traders on the Reddit message board Wall Street Bets. Mentions of UiPath have increased recently, with one WSB monitor citing a 500% increase in mentions for the stock over the weekend. That likely came when one popular WSB Redditor posted Friday that his next big stock bet is UiPath. If other message board traders follow this poster’s bet, that could be spurring buying and short covering action on Monday.

Image source: Getty Images.

Do your own due diligence

UiPath is still down hugely from its 2021 highs, so if it can harness the power of AI to boost its automation software, the stock could stage a comeback. However, AI also has the potential to raise competition for UiPath, given that a number of AI companies, from the “Magnificent Seven” to OpenAI, are all looking to serve enterprises with AI automation tools.

That being said, that competitive threat has made UiPath trade rather cheaply for a software company, at just 4.3 times sales and 18 times next year’s adjusted earnings estimates.

Shares of hard disk drive manufacturer Seagate Technology (STX 2.12%) rallied this week, up 11.8% this week through 1:54 p.m. ET Friday, according to data from S&P Global Market Intelligence.

Seagate had a relatively quiet week in terms of company-specific news; however, positive data around demand for storage at the edge due to a spike in artificial intelligence (AI) inferencing has led to several analyst upgrades this week.

Seagate gets massive upgrades

Artificial intelligence and semiconductor-related stocks were already on the rise this week, following the last week’s blockbuster AI guidance from Oracle, along with the Federal Reserve’s interest rate cut this week — the Fed’s first cut since last year.

Lower interest rates generally mean lower costs of capital, and large tech stocks are spending boatloads of cash on AI infrastructure this year. So lower interest rates bring the prospects of only fueling that spending even more.

Meanwhile, the composition of that infrastructure is changing, moving from training generative AI models to inferencing, which is the use of those models in everyday tasks.

Inferencing is leading to a new wave of investment in edge storage, where Seagate’s HAMR technology leads the industry in terms of squeezing more TB of data onto each disk. That led to a couple of sell-side analysts upgrading the stock this week.

On Monday, Bank of America upgraded its price target on Seagate from $170 to $215 while reaffirming its “buy” rating, based on a more optimistic outlook for AI spending. Then today, Mizuho analyst Vijay Rakesh increased his target on Seagate by an even greater amount, from $160 all the way to $245. Rakesh’s upgrade follows channel checks indicating strong demand and rising prices for both hard disk drives and NAND flash.

Image source: Getty Images.

But remember: Storage is cyclical

After this week’s surge, Seagate is up a whopping 155.4% year to date, exceeding the gains of many more popular AI leaders.

And while things look rosy today, the memory and storage industry has been quite cyclical in the past, leading to a boom-and-bust dynamic. We’re clearly in a “boom” stage right now, and the length of that stage will be determined by how long the AI infrastructure build-out will take. Many believe it will take several years, but investors should be aware that any macroeconomic hiccups or flagging demand for AI services could lead to severe pullbacks.