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Delta pilots plan to picket, Nvidia and AMD hit 52-week lows, UBS reaffirms Peloton ‘sell’ rating

Yahoo Finance Live checks out several of today's trending stocks, including Delta Airlines' plan to offer free flight changes this July 4th weekend and chip stocks declining ahead of Congress' CHIPS Act.

Video transcript

RACHELLE AKUFFO: We'll get into more specific stocks with Triple Play, which is next. So the slide for semiconductor firms continues with my picks, NVIDIA and AMD. Now, both stocks actually hit 52-week lows in intraday trading and have been struggling for the last five trading sessions. Now, the downside for chip stocks is expected to linger. We have US production hampered by a lack of funding action from Congress, slow auto production, a glut from overbuying when people were worried about the supply chain constrictions, and then, of course, recession fears.

Now, Columbia Threadneedle Senior Equity Analyst Dave Egan, he does expect a healthy rebound, but it will take a couple of years. He's saying that data centers, vehicles, industrial sectors, and health care are increasingly relying on these chips. So he's definitely bullish. Columbia Threadneedle data shows that semiconductor sales are expected to double between 2020 and 2030 to around $1 trillion. So short to mid-term pain for now, long-term gain expected, at least predicted by them.

SEANA SMITH: Yeah, so I think we have a lot to work out until we get to that long-term gain. Just in terms of the shortage that we're seeing here in the US, you mentioned the lack of funding. US had promised $52 billion for chip makers here in the US. Intel CEO Pat Gelsinger was quoted not too long ago warning that if they don't get that funding, that could potentially be pretty devastating here for the industry.

We have seen the impact that this is having on our economy. Just look at the vehicle, the automaker market alone. They simply cannot meet demand. They're so far from being able to reach demand. That, of course, is having an impact on the price of cars. So yes, certainly a bright future when you look at demand for chips. The big question, though, is how we're going to bridge that gap in the meantime.

All right, my play is Peloton. Shares hitting an all-time low on a cautious note from TheStreet. UBS reaffirming its sell rating on the stock and its $13 price target, citing declining adoption trends of Peloton's app. Now, this is obviously a worrisome sign here for the company. UBS's analysis showing a drop in active users and caution that they expect to see further volatility in this data point over the next three to six months.

Peloton now off more than 90% from its peak in early 2021. And, Dave, we know that this was a pandemic favorite here. So many people, myself included, ordered a Peloton during the pandemic. They ramped up production. And now simply, they don't have the demand, and they're also seeing that reflected in the app.

- And they're for sale at Rachelle's apartment. And I've been saying this for months, there was not enough emphasis on the app. And now it's coming back to bite them. Was really surprised, though, to hear how much Planet Fitness's app has grown, 23% to 44% to 54% market share in the last three months, through the roof. But this really caught my eye from research firm New Constructs. Listen to this one. "Investors may not realize the company only has a few months worth of cash remaining to fund its operations." And here's the key, "puts the stock in danger of falling to zero per share." Yikes. You don't want that out there if you are Peloton.

My play is Delta Airlines, under pressure for massive cancellations in recent weeks, as most of you are aware. Delta announcing today, though, it will allow travelers to change their tickets for free during this busy upcoming 4th of July weekend, allowing passengers to avoid paying a fare difference provided they keep the same origin and destination and travel by July 8. So there's a lot of buts there.

Meanwhile, hundreds of off-duty Delta pilots plan to picket this week demanding a pay increase and that the carrier change their schedules to reduce flight disruptions. Delta has been quick to point out this is a picket, it is not a strike, and says their schedules will not be impacted. Shares of DAL down 26% year-to-date after falling just over 2% today. It's been a rough go for Delta in recent weeks, Rachelle.

RACHELLE AKUFFO: I will say, it hasn't been quite as much of a rough go for Delta Airlines CEO Ed Bastian. He's actually the best paid US airline CEO last year, with a compensation package that included $12.4 million, mostly in stock awards, during the year. So as you take a look at some of these Delta stocks and some of these other airline stocks not faring so well, at least the CEO compensation package not suffering at least.

SEANA SMITH: That might come under fire here pretty soon if they don't get things under control. But I think every single traveler, if you talk to someone who has been at the airport within the last couple of weeks, last several months, they can tell you how busy the airport is these days, how many travel disruptions they have encountered firsthand, because they can't meet the demand, because they don't have the pilots, because they don't have the staffing that they need. So it's a huge issue within the industry. And the most worrisome thing, I think, Dave, is the fact that there doesn't really seem to be a viable solution in sight. This seems like an issue that's going to persist now for at least the next couple of months.

- What is a logical solution? Demand slowing is it because they're not going to be able to fill the void of pilots. And the big problem we're seeing is air traffic controllers as well. Talking to a guy waiting five-plus weeks for a refund. Now.

SEANA SMITH: Yeah, I know.

- So it's a major issue all across the country.

SEANA SMITH: It certainly.

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