A nagging blindspot for Sirius XM Holdings (NASDAQ: SIRI) investors and most Tesla (NASDAQ: TSLA) drivers is finally starting to fade in the rearview mirror. Tesla's best-selling vehicles -- the Model Y, Model 3, and Cybertruck -- don't ship with factory-installed satellite radios. Only the higher-priced Model S and Model X come with Sirius XM receivers, but those cars accounted for less than 4% of Tesla's deliveries last year.

An owner of one of the more widely owned models has had to use Bluetooth connectivity to stream from their phone app or use Tesla's web browser to access an active Sirius XM subscription. The process is getting far more seamless this week as Tesla pushes out its holiday update.

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In a move that is long overdue, Tesla's latest over-the-air software update introduces an application to stream the country's only satellite radio provider's platform from the car's app tray. It's better late than never, and given Sirius XM's moribund stock chart anything that can get it dancing to a new beat is welcome.

Passing spaceships

Sirius XM investors have had a rough year. The stock has been cut nearly in half, a stark contrast to the otherwise rising equity prices. The market is concerned about its recent turn to negative revenue and subscriber growth, leading worrywarts to wonder if the satellite radio monopoly peaked last year. It doesn't seem to matter that Warren Buffett is increasing his stake in Sirius XM or that the media stock is trading for just 8 times forward earnings. Investors are ignoring the low valuation and nearly 4% yield on fears that the Sirius XM is slowly fading out.

On the other end of this story, Tesla shares have risen more than 40% this year. The electric vehicle maker has seen its stock nearly triple since the start of last year. Tesla's rise comes despite sluggish sales and concerns that tax credits on electric vehicle purchases can go away soon. This is offset by Tesla's ability to boost year-over-year margins despite slashing prices on its cars and subscription services to remain competitive in a cutthroat market.

The two companies may seem to be going in different directions, making this story even more interesting. There are a lot of new features rolling out in this week's Tesla software update that will be ultimately more valuable to car owners. However, this simple move to include a Sirius XM option on the Tesla app tray screen can actually sway the market's perception of one of this year's biggest losers.

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Aswath Damodaran, finance professor at New York Univerisity’s Stern School of Business, told Bloomberg Television on Monday that he recommends buying any of the Magnificent Seven stocks on dips. 

What To Know: Corrections will occur and "I'd suggest that when that happens you find a way to add at least one, maybe two or three of these companies, because these are so much part of what drives the economy and the market," Damodaran said.

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It has been difficult to buy the dip on a Magnificent Seven stock as the tech giants have climbed throughout 2024. The Roundhill Magnificent Seven ETF (NASDAQ:MAGS) offers equal-weight exposure to the Magnificent Seven stocks and is up nearly 60% year-to-date.

"As a value investor, I have never seen cash machines as lucrative as these companies are," Damodaran said. "And I don't see the cash machine slowing down."

Apple, Inc. (NASDAQ:AAPL) and Nvidia Corp. (NASDAQ:NVDA) continue jockeying for the top position as the largest company in terms of market capitalization. Apple currently holds the largest market cap at $3.67 trillion, while Nvidia is in second place with a market cap of $3.44 trillion. Microsoft Corp. (NASDAQ:MSFT) remains in third with a market capitalization of $3.21 trillion.

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Tesla, Inc. (NASDAQ:TSLA), formerly the laggard of the seven, has gained more than 40% over the past month. CEO Elon Musk has grown into a trusted advisor of President-elect Donald Trump and investors are betting Tesla will benefit under the Trump administration.

Though not quite a dip, Alphabet, Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) shares have remained flat over the past month as the company faces ongoing litigation and the potential sale of its Chrome browser in a federal antitrust lawsuit.

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Artificial intelligence (AI) has been a hot trend for investors all year, and as a result, popular AI stocks have been on a tear. Nvidia is up more than 183% so far this year. Palantir Technologies has jumped more than 313%.

Meanwhile, Microsoft (NASDAQ: MSFT) -- which is heavily invested in AI through its stake in ChatGPT's parent, OpenAI -- has risen a poky 14.7%. That doesn't just pale in comparison to other AI stocks, it's a worse year-to-date return than the S&P 500, which is up 26.8%.

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However, one Wall Street analyst thinks Microsoft still has plenty of upside, and he is expecting big things from the company over the next six months. Here's what he thinks the market's missing.

Says who?

The analyst in question is Citibank's co-head of U.S. software equity research, Tyler Radke, who has been following Microsoft since 2021. During that time, he's gotten to know the company about as well as any outside analyst can.

Last month, Radke had a meeting with Microsoft's investor relations team and the CFOs of several of its business divisions. Afterward, he issued a note reiterating his buy rating and $497 price target on the company's stock, which currently sits at about $430 a share. His target represents a 15% upside to the share price.

More importantly, Radke expects the company's growth numbers to improve during the first six months of 2025. If he's correct, that means there's only a brief window for investors to pick up shares before the market sees the improvement and bids up shares.

Why he might be right

Radke was impressed with Microsoft's focus on cutting costs and improving the efficiency of its operations, especially in the AI space, where the costs of ramping up have been high.

"The theme of cost optimization/efficiency was common throughout each meeting and gave us confidence the company can continue to maintain strong earnings growth through the AI investment cycle," he wrote in a note to Citibank clients.

In addition to its large investment in OpenAI, Microsoft has spent substantial resources developing its Copilot AI assistant and has now embedded it within its internal and external software, including Microsoft 365. It has also spent time training its staff to utilize Copilot to improve efficiency. Now that the software is deployed, Radke expects productivity at the company to skyrocket.

Boosting productivity, he noted in an interview with Fox Business News, used to be an excuse for layoffs, but now it's "about increasing the productivity of the people you have. You think about some of these developers: now they're 50% more productive using some of these [AI] tools like Microsoft Copilot."

Keefe Bruyette raised the firm’s price target on Morgan Stanley (MS) to $138 from $121 and keeps a Market Perform rating on the shares. The U.S. bank stocks have had a strong run following better than expected earnings and, more importantly, the election results, the analyst tells investors in a research note. The firm believes there are “potential tangible outcomes” post-election to drive higher earnings, including investment banking, trading, market sensitive revenues such as custody and asset management. Moreover, the proposed Basel III Endgame requirements are likely to continue to be watered down, adds Keefe. As such, it thinks the group will experience a re-rating given expectations for positive estimate revisions, expanding returns on tangible common equity and greater regulatory capital relief than other banks sectors.

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The latest trading session saw Tilray Brands, Inc. (TLRY) ending at $1.28, denoting a -1.54% adjustment from its last day's close. The stock's performance was behind the S&P 500's daily gain of 0.61%. Meanwhile, the Dow experienced a rise of 0.69%, and the technology-dominated Nasdaq saw an increase of 1.31%.

Heading into today, shares of the company had lost 26.55% over the past month, lagging the Consumer Staples sector's gain of 0.93% and the S&P 500's gain of 5.79% in that time.

Analysts and investors alike will be keeping a close eye on the performance of Tilray Brands, Inc. in its upcoming earnings disclosure. Alongside, our most recent consensus estimate is anticipating revenue of $225.56 million, indicating a 16.41% upward movement from the same quarter last year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of -$0.14 per share and a revenue of $911.24 million, representing changes of +57.58% and +22.6%, respectively, from the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Tilray Brands, Inc. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. As of now, Tilray Brands, Inc. holds a Zacks Rank of #2 (Buy).

The Consumer Products - Staples industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 150, which puts it in the bottom 41% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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