Hottest Stocks in CW 27/26

For a long time, there was little to gain from Bayer shares on the stock market. Since the end of 2024, however, the stock has been moving higher again, most recently helped by an important legal breakthrough in the glyphosate dispute. As a result, the share price gained almost 24 percent last week. The trigger for the rally was a ruling by the U.S. Supreme Court in the closely watched glyphosate litigation. The court ruled seven to two in favor of Bayer and its subsidiary Monsanto. According to the ruling, federal regulations governing pesticide labeling take precedence over differing warning requirements imposed by individual U.S. states. As a result, many lawsuits alleging insufficient cancer warnings on Roundup products lose a central legal basis.

Following the Monsanto acquisition in 2018, the results of the Rhineland-based company were repeatedly burdened by legal costs, provisions and balance sheet risks. In total, the group has already spent more than 10 billion dollars in this context. Shortly before the Supreme Court ruling, a U.S. federal judge referred another planned 7.25 billion dollar settlement back to a court in Missouri, thereby leaving open the way for an accelerated review.

The stock market welcomed the new ruling with great relief. The analysts at BofA Global Research described it as a “major victory” in the glyphosate litigation. While the ultimate scope of the legal proceedings still depends on the success of the class settlement, the positive Supreme Court decision significantly reduces the risk of new legal avenues. With a calculated fair value of 50 euros, the analysts are only slightly below the consensus price target of around 51.50 euros.

TRADING-SENTIMENT

The wikifolio traders have been on the buying side in Bayer for quite some time, which has now paid off at the latest. Over the past seven days, the buying surplus has increased even further. Mate Gotovac had already opened a position for his wikifolio Value und Charttechnik last Monday and increased it again on Friday. As a result, the stock currently shows a book gain of approximately 10 percent. By combining value assessments with technical analysis, the trader invests in what he considers undervalued stocks that are then intended to be held over the short to medium term. Three years after launch, this approach has generated a performance of 84 percent, or 22.5 percent per year on average.

Defense company Rheinmetall lost 21.7 percent in value last week. The main burden was the decision by the German Federal Ministry of Defence to terminate the F126 frigate program. The project had originally been designed for six ships, had already incurred costs of around 2.3 billion euros and would have risen to more than 18 billion euros if continued. Rheinmetall, together with its shipyard subsidiary NVL, had hoped to take over the program. The expected order volume was around 12 billion euros and was considered a major component of expected orders for 2026. The German government now intends to procure eight smaller Meko A-200 frigates from ThyssenKrupp Marine Systems.

Several analyst firms reduced their earnings estimates following the announcement but described the share price decline as exaggerated. In fact, the reduction in market capitalization of more than 10 billion euros exceeded the expected earnings contribution from the canceled contract many times over. Many institutions attribute this to a loss of confidence in German procurement policy. Warburg lowered its price target for Rheinmetall from 1,550 euros to 1,500 euros while maintaining its Buy recommendation. Even more optimistic is the U.S. investment bank Morgan Stanley, although it significantly reduced its price target from 2,500 euros to 1,750 euros. As a result, the consensus price target, which most recently stood at 1,938 euros, is also likely to decline in the near future. The share currently trades at only around 950 euros and has therefore lost almost 40 percent in value since the beginning of the year.

TRADING-SENTIMENT

Several company insiders responded to the price decline with reportable purchases of Rheinmetall shares. wikifolio traders were also increasingly willing to build positions at the reduced price level. A look at trading sentiment shows a clear buying surplus in recent days. Kevin Tarantino is focusing precisely on the current price level: “My speculation: A strong rebound at the critical support level of 950 euros.” In his view, the sell-off is “completely exaggerated.” The trader describes Rheinmetall as one of the main beneficiaries of Europe's military rearmament. The gigantic record backlog of around 73 billion euros provides “extreme visibility for the coming years.”

His wikifolio Hi5 Trend Selection currently consists almost 100 percent of Rheinmetall. As selection criteria for portfolio holdings, he cites “fundamental concepts of technical analysis as well as fundamental, qualitative valuation criteria.” After just over one year, the portfolio is already up 87 percent with a maximum draw down of 26 percent. Since the beginning of the year, the portfolio has gained 53 percent despite a monthly decline of ten percent and Rheinmetall's current loss of seven percent.

CIENA shares gained 13.7 percent last week. The American networking equipment provider sells optical transmission technology, routers, software and services for telecommunications networks, cloud providers and data centers. The company is therefore currently benefiting from the continued strong demand for high-speed data connections for AI clusters, as large data centers require more capacity between servers, locations and network layers.

Needham analysts subsequently raised their price target from 470 dollars to 600 dollars, citing the strength of the cloud business. Barclays increased its target from 372 dollars to 607 dollars, pointing to improved margins, results above expectations and the higher full-year forecast. Despite this, investors initially took profits in the previously very strong-performing stock. Last week, BNP Paribas then reiterated its Buy recommendation and increased its fair value estimate for the stock to 640 dollars (from 625 dollars previously). As a result, Ciena recovered part of its previous losses and posted a double-digit gain.

TRADING-SENTIMENT

However, the consensus price target is only slightly above 396 dollars, significantly below the current share price. This may also explain why some traders used the recent recovery to take profits. Christoph Gum entered the U.S. stock three months ago via the wikifolio Alpha AI Leaders. Last Monday, the specialist from Private Alpha Switzerland AG sold his remaining shares for a gain of around six percent. The overall performance of the portfolio is considerably stronger. Since February 2023, it has achieved a return of 209 percent, or exactly 40 percent per year on average, with a maximum drawdown of just over 40 percent. The investment professionals use proprietary Artificial Intelligence to invest in potential AI leaders and have been highly successful with this strategy so far.

Applied Optoelectronics, a supplier of optical transceivers, lasers and components for data centers, cable networks and telecommunications infrastructure, lost 18.3 percent last week. The company’s modules convert electrical signals into optical signals, thereby enabling high data transmission rates in AI data centers. This had driven the share price sharply higher since the beginning of the year (at its peak, it had increased almost sevenfold). Recently, however, the rally clearly began to lose Momentum. Last week, the broad correction in AI-related optics and photonics stocks weighed on the share. Lumentum, Coherent and other suppliers of optical networking technology also posted significant declines.

The results published at the beginning of May reflected strong growth. In the first quarter, revenue increased by 51 percent to 151.1 million dollars. Revenue from the data center business rose by 154 percent to 81.4 million dollars. For the current second quarter, Applied Optoelectronics forecast revenue of 180 million to 198 million dollars. For 2026, the group expects revenue of more than 1.1 billion dollars and adjusted operating income of more than 140 million dollars. Rosenblatt analysts subsequently reaffirmed their Buy rating. However, the summary shows that the share price had moved beyond the consensus price target. Following the recent correction, the situation has reversed.

TRADING-SENTIMENT

Nevertheless, some wikifolio traders have at least partially parted with the stock during the price decline. One of them is Jörn Remus, who has traded Applied Optoelectronics very actively in recent months through his wikifolio Nordstern. The most recent position was established three weeks ago, and since then the shareholding has been increased and reduced several times. Since the beginning of last week, however, the trader was predominantly on the selling side before buying again on Friday. The stock currently represents just over five percent of the portfolio, making it the third-largest position. After more than eleven years, the wikifolio has achieved a gain in value of 817 percent (22 percent per year).

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