Chip stock ASML, weight-loss drug leader Novo Nordisk and music streaming platform Spotify headline Wednesday's stocks to watch.
Wednesday's stock picks come from IBD MarketSurge's RS Line Blue Dot screen. This screen identifies top-rated stocks with relative strength lines that are making new highs during the basing process or on the breakout. That's a hallmark of previous stock market winners.
ASML and Novo Nordisk are both IBD Leaderboard stocks.
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ASML Stock Breaks Out
Last week, ASML stock topped an early handle buy point at 992.88. And now the stock is breaking out past a 1,056.34 entry in a cup base, with a 3.3% rally in afternoon trading. The 5% buy zone extends to 1,109.16.
ASML is the world's only manufacturer of extreme ultraviolet lithography equipment used in chipmaking.
On June 5, ASML stock surged more than 9% after a news report said that Taiwan Semiconductor Manufacturing had purchased ASML's high numerical aperture, extreme ultraviolet lithography system. A TSMC executive had previously said the high-NA EUV machine was too expensive. Each one costs about $380 million.
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Spotify Stock Near Buy Point
Weight-loss drug leader Novo Nordisk is at the top of its buy range from a cup-with-handle entry at 137.22, according to IBD MarketSurge. Novo shares rose 1% Wednesday at midday.
In early May, Novo Nordisk said that sales of its weight-loss blockbuster Wegovy nearly doubled year over year, but missed even more bullish expectations.
NVO shares initially sank below their key 50-day line, but they have recovered over the past few weeks.
Wegovy generated $1.34 billion in sales, skyrocketing more than 99%, according to FactSet. But the Street projected an even stronger $1.49 billion, signaling Novo Nordisk is still struggling to meet demand for its popular obesity treatment.
Music streaming leader Spotify is just below a 319.30 buy point in a flat base following last week's breakout attempt. Spotify stock moved up nearly 1% midday Wednesday, about 2% below its latest entry.
Last week, the company hiked U.S. subscription prices for its premium services for the second time this year. Starting in July, Spotify Premium members will have to pay a dollar more for their individual subscriptions, or $11.99 a month. The individual plan now will be priced $1 above Apple Music, noted Evercore ISI analyst Mark Mahaney in a report.
For investors in Spotify stock, two questions are whether Spotify will hike prices in more countries and how many subscribers would respond by canceling.
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