In July, the S&P 500 (S&P 500) and Nasdaq Composite (Nasdaq Composite) reached all-time highs, yet there’s a multitude of robust companies in thriving sectors that could offer attractive discounts at present.
Let’s examine two stocks that have impressive earnings, and their prices seem so attractive, we might be missing out if we don’t consider investing in them.
1. Carnival
Over the last few years, Carnival Corporation & Cruise Lines (CCL) has experienced a robust rebound. The company’s stock has surged by 258% since the end of 2022, backed by eight successive quarters of unprecedented revenue. Moreover, there are additional factors that could propel further growth for investors who purchase shares at the current price of around $30.
Despite some difficulties in specific economic areas, it seems that the desire for cruises remains unabated. Carnival has even boosted its annual forecast for net yields to 5%, a significant indicator of a cruise company’s profitability. Bookings are keeping pace with last year’s record high levels and are at prices historically high, which positively impacts yields and earnings. Consequently, analysts predict that full-year adjusted earnings per share will reach $2, an increase of 40% compared to the previous year.
One potential drawback for Carnival is its significant amount of debt. At the end of the last quarter, it had a total debt of approximately $27 billion. However, its debt-to-equity ratio reached 5.75 in 2023 but has since decreased to 2.72. As profits increase, Carnival is able to pay down some of this debt, which not only lowers its risk level but also reduces the amount of interest expenses, potentially leading to higher earnings.
Carnival is planning additional attractions to increase interest, including the debut of Celebration Key, their exclusive island in Grand Bahama. As we look toward 2026, Carnival plans to expand RelaxAway, their tranquil paradise on Half Moon Cay in the Bahamas.
Carnival isn’t merely a company poised for post-pandemic resurgence; it’s strategically aiming for sustained growth that benefits its shareholders in the long run. To elaborate further, Carnival is capitalizing on the expansion of the experience economy, where individuals are increasingly choosing to invest in memorable experiences over traditional material possessions.
By fiscal year 2029, analysts anticipate Carnival’s earnings will hit approximately $3.10 per share, or they project a growth rate of almost 17% annually from fiscal year 2024. Given that the stock is currently valued at roughly 10 times these projected earnings, there remains considerable room for price increases from the current market value.
2. Alibaba
Alibaba, identified by the ticker symbol BABA, ranks among China’s prominent tech giants, maintaining strongholds in e-commerce and cloud computing sectors. Following a significant dip from its peak prices, the stock is on a rebound path. However, it remains potentially underpriced based on current market values.
Although Alibaba saw a 7% rise in annual revenue and an impressive 23% surge in earnings during the last quarter, its shares are priced at a future earnings ratio of 12. This relatively low valuation can be attributed to geopolitical uncertainties and intensifying competition from other online marketplaces.
For several justifications, it appears that the conservative estimate could be underestimating the value. Despite a 1% decrease in direct sales on Alibaba’s domestic e-commerce platforms last quarter compared to the previous year, the segment’s overall revenue increased by 9%. This is because Alibaba has been increasing fees for its marketplace sellers. The fee-based model gives Alibaba flexibility to keep revenues expanding even during challenging economic periods.
The company also demonstrates strong potential for global growth, as AliExpress increased its annual revenue by 22% during the last quarter. Notably, the leadership anticipates that their international e-commerce sector will become profitable this fiscal year.
As an ardent follower of the tech world, I can’t help but be thrilled about Alibaba’s current momentum! The real powerhouse for them at the moment is their cloud division, Alibaba Cloud, which is on a roll. Last quarter alone, it reported a robust 18% year-on-year revenue growth, and this upward trend might even pick up pace, given the persistent demand for Artificial Intelligence (AI).
You see, AI-related services have been consistently bringing in revenues at triple-digit rates for an impressive seven consecutive quarters. The demand is not confined to a single sector; it’s widespread across industries such as internet, retail, and manufacturing. This diversity of demand only adds to the potential growth for Alibaba Cloud, making their stock a potentially lucrative investment!
In the month of April, Alibaba unveiled its innovative Qwen3 AI system, boasting advanced reasoning abilities and swift responses. This year, Alibaba’s shares climbed higher upon news that they would be collaborating with Apple to integrate this AI technology into iPhones within the Chinese market.
The share price dropped by 23% from its peak in February, but if the next quarter’s performance exceeds expectations, particularly regarding Alibaba Cloud and Artificial Intelligence, there’s a possibility it could reach record-breaking levels again during the latter part of 2025.
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2025-07-19 11:20