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🦉 The Night Owl Newsletter for December 21st
Unsubscribe Starlink’s $100 Billion IPO: Your Chance to Invest Early (From Paradigm Press)2 Stocks to Avoid as Crypto Momentum WanesWritten by Dan SchmidtThe northeast United States wasn’t the only region gripped by bitter cold this month—a new winter has also hit the cryptocurrency market. Weak sentiment and choppy trading threaten Bitcoin with its worst yearly performance since 2022. What’s caused the cryptocurrency stallout in 2025, and can investors hope for a brighter year in 2026?Below, we’ll explore why digital assets have floundered in 2025, and name two crypto-related companies you might want to stay clear of until Bitcoin reverses its momentum.Crypto Has Lagged Most Asset Classes in 2025Cryptocurrencies entered the year with plenty of momentum, but the strong bullish sentiment waned as Bitcoin’s price wobbled. Following the 2024 U.S. Presidential election, Bitcoin soared from $70,000 per token to over $120,000 amid anticipation of a friendlier regulatory environment and increased investor risk-taking. We’ve seen more risk-taking from investors (look at all the dips that were bought this year!), but the friendlier regulatory environment hasn’t materialized in the way Bitcoin bulls hoped.The Trump administration eased some rules on cryptocurrency trading, but the main regulatory focus remains uncertain. The U.S. House of Representatives passed the Clarity Act last summer to establish clearer rules for digital assets. However, the bill is unlikely to make it through the Senate as currently conceived, and draft revisions are underway on both sides of the aisle. The Senate is hopeful for a vote in 2026, but no firm date is scheduled.U.S regulators are the only concerns of the crypto market. While the current government is more open to digital assets than previous administrations, the same can’t be said for other world leaders. The European Union tightened oversight of crypto exchanges and stablecoins, as did some Asian regulators. And of course, cryptocurrency mining and trading remain completely banned in China. Cryptocurrency was becoming a proxy to the broader tech sector, moving in lockstep with risk-on assets like AI stocks. However, the chart above shows that the correlation has broken down, and Bitcoin is now underperforming not just stocks but also commodities and bonds.2 Stocks to Avoid as Crypto Markets StallWith the launch of Bitcoin and Ethereum ETFs, investors now have easy access to major cryptocurrencies through traditional channels. As a result, stocks once valued for their crypto exposure—like miners and treasury-heavy companies—are losing investor interest.Two stocks stand out as especially vulnerable in the current environment. Both have significant crypto exposure, and their recent moves suggest growing financial and technical risks.SharpLink Gaming: Overvaluation and Liquidity ConcernsSharpLink Gaming Inc. (NASDAQ: SBET) made plenty of headlines earlier this year when the small gaming and advertising company made a full-fledged pivot to crypto.After hiring Ethereum co-founder Joseph Lubin to the C-suite, SBET doubled down by converting the company into an Ethereum treasury, buying more than $3 billion in ETH tokens and staking nearly all of them to earn yield.The resulting yield has brought in record revenue, but the company’s future is now entirely tied to Ethereum’s price.If regulators deem ETH tokens a security next year, SharpLink may be forced to register as an investment company, triggering significant compliance costs and business model shifts. The stock is also facing pressure from valuation and technical headwinds. Despite record revenue, the company still lost 63 cents per share in Q3 2025, and the stock is still heavily overvalued despite the recent decline. The Moving Average Convergence Divergence (MACD) indicator just formed a bearish crossover, hinting that another burst of downward momentum could hit the stock soon.TeraWulf: Debt Risk Becoming BurdensomeTeraWulf Inc. (NASDAQ: WULF) has a noble goal: to become the first carbon-neutral cryptocurrency miner. One of its facilities, Project Nautilis, runs entirely on hydroelectric power out of New York.TeraWulf also offers high-performance computing (HPC) solutions to data centers, and this combination of revenue sources has led WULF shares to a 120% year-to-date (YTD) performance.But the company’s rapid expansion was mostly debt-fueled, and now, debt issues are surfacing.TeraWulf had about $5 billion in debt financing agreements on the books in 2025, with total debt now exceeding $1.5 billion. Analysts warn that this debt load could become unmanageable as costs rise and liabilities grow even closer to matching the company’s assets. The fundamental weakness has boiled over into the chart, and now technical headwinds threaten to bring the stock down from its lofty perch. A key support area at the 50-day simple moving average (SMA) has been broken, and this breakdown was confirmed with a bearish crossover on the MACD. While TeraWulf isn’t solely reliant on Bitcoin for income anymore, a further decline in BTC could put serious pressure on the company’s growing debt woes. READ THIS STORY ONLINEStrange picture signals market shift in 2026? (Ad)While market uncertainty could send some of America’s most popular stocks crashing down even further in 2026 …This secret has identified three under-the-radar picks that could thrive in 2026 and beyond. To learn their names and ticker symbols for FREE … CLICK HERE NOW — BEFORE IT’S TOO LATE.3 Dividend Growth Stocks Analysts Are Upgrading for 2026Written by Thomas HughesA single analyst’s rating and price target, the consensus rating and price target, for that matter, have little value to investors without the proper context. The context is the sentiment strength and trend, which for stocks like PepsiCo (NASDAQ: PEP), AbbVie (NYSE: ABBV), and United Parcel Service (NYSE: UPS), is strong and bullish.The sentiment strength is reflected in the number of analysts covering and the level of recent activity; the trend is the direction of revisions, either higher or lower, and in whether they are leading the market with an increasing or declining consensus price target. This article examines the sentiment trends for the aforementioned stocks and their (bullish) implications for investors in 2026. PepsiCo Analysts Highlight a Deep-Value/High-Yield OpportunityPepsiCo, like other consumer staples stocks, has struggled in recent years. The impacts of recalls, compounded by macroeconomic headwinds and consumer shifts, resulted in tepid growth and lackluster stock performance, but those days are behind it. The market has priced in the worst; improvements are taking hold, and analysts’ sentiment trends shifted back into an accumulative posture late in 2025. MarketBeat tracks 15 Q4 revisions as of mid-December, including numerous price target increases and several upgrades. The consensus rating is a Hold, but the bias is bullish, with coverage up year-over-year, upgrades in the mix, and eight of the 22 total ratings pegged at Buy. The consensus price target, up from its mid-year low, forecasts a 5% upside from the critical resistance point. Regarding the value, PepsiCo’s P/E has run closer to 25x earnings on average, suggesting a significantly larger upside is possible. Long-term forecasts put PEP stock at approximately 15x its 2030 earnings, implying as much as 50% upside. The analysts’ shift highlights the value and yield opportunities, with PepsiCo trading near the low end of its historic P/E range and the dividend yield at 3.75%, near the high end of its range. Technically, the stock price retreated to a long-term uptrend line in 2025, triggering a trend-following signal indicating steadily increasing price action in 2026.  AbbVie Uptrend Is Healthy and IntactAbbVie’s analysts’ activity reveals that its Q4 price pullback is setting up a buying opportunity. MarketBeat tracked more than a dozen revisions from among 25 analysts, including a few downgrades, but the upgrades and price target increases offset them, keeping the uptrend intact. The two downgrades are to Hold and are accompanied by consensus-affirming price targets; the remainder of the activity is reaffirmed bullish ratings and price targets, price target increases, and two upgrades to Buy. The takeaway is that ABBV’s coverage is strong and steady, and sentiment is firm, with a rising price target, despite some mixed sentiment. Consensus forecasts a 10% upside, sufficient for a fresh all-time high, and the business trend suggests it will continue to move higher. AbbVie’s driving factor is its move away from Humira. Once dependent on it for revenue, AbbVie now has a solid portfolio of fresh blockbusters, a well-diversified product portfolio, and a healthy pipeline to ensure future results. The dividend yields an annualized 3.08% in December and is of Dividend King quality due to its healthy balance sheet and history with Abbott Laboratories. United Parcel Service: High Yield With Limited DownsideUnited Parcel Service stock is not without risks, but analysts’ sentiment trends limit the downside. MarketBeat data reveals eight revisions from 30 analysts following its Q3 release, providing ample coverage and reasonable conviction in the sentiment shift.All affirm the consensus target, forecasting a 10% upside from critical support, with six price targets increased and one upgrade. The consensus is Hold, but the bias is now bullish, and the price target trend is leading to an above-consensus price point. A move to $110 is sufficient to trigger a technical reversal in this market. The price action is favorable for this 6.5% yielding stock. The market hit a bottom in Q4 and rebounded, regaining support at the cluster of moving averages. This is a critical level that reveals buying among near-term and short-term traders and long-term investors, suggesting that market forces are synchronizing. In this scenario, UPS stock could confirm its reversal within weeks and then continue higher in 2026. READ THIS STORY ONLINEStarlink’s $100 Billion IPO: Your Chance to Invest Early (Ad)Elon Musk’s Starlink project is generating major speculation ahead of a potential IPO that some analysts believe could reach a historic $100 billion valuation. According to James Altucher, there may be a smart “backdoor” way for everyday investors to position ahead of that event without needing traditional IPO access — and he says it can be done for under $100. He’s also sharing a free ticker tied to this trend for anyone who wants to take a closer look. CLICK HERE TO LEARN MOREThese 3 Banks Are Rallying Into Year-End, But Will It Continue?Written by Sam QuirkeWhile artificial intelligence (AI) has dominated headlines for much of the year, and sent many tech stocks soaring, some of the strongest performance across equities has come from far less glamorous corners. Bank stocks are in the middle of a standout run, with the Financial Select Sector SPDR ETF (NYSEARCA: XLF) having just hit an all-time high. That strength has come despite the Federal Reserve entering a softer phase, with rates no longer rising and expectations building that the tightening cycle is largely done, for now at least. That combination forces an uncomfortable but necessary question. If banks have already rallied hard into a rising rate environment, can the good times realistically continue into 2026? To answer that, let’s take a closer look at three of this year’s better-performing bank stocks and see how each is setting up in January. Citi Is Leaning Into Broader MomentumCitigroup Inc (NYSE: C) has been one of the standout stories of the year. The stock is up nearly 60% year-to-date (YTD) and more than 14% over the past month alone, supported by a string of earnings beats and improving investor confidence.For now, it looks like this uptrend is set to continue, with J.P. Morgan last week upgrading the stock to Overweight.The team there flagged Citi’s ability to benefit disproportionately from a solid economic backdrop and strong markets-related activity, and sees it as being more favorably exposed to key trends.They were also impressed by improvements in Citi’s restructuring efforts, which are finally showing through in the numbers.J.P. Morgan’s new price target of $124 implies upside of more than 10% from current levels. Even after a solid rally throughout the year, the bank is still viewed as having room to run into 2026. Goldman’s Valuation Might Be Starting to Get OverheatedGoldman Sachs Group Inc (NYSE: GS) has also delivered an impressive year, with shares up about 52% YTD and roughly 13% since the back end of November. The stock began December with seven consecutive sessions of gains, underscoring the strong sentiment surrounding the name.Operationally, the performance has been hard to fault. Like Citi, Goldman has also consistently beaten earnings expectations throughout the year and benefited from improved capital markets activity and tighter cost discipline. That strength has rewarded shareholders handsomely, but it has also pushed valuation to more demanding levels.Goldman’s P/E ratio is now at its highest point since 2018, which has prompted some analysts to strike a more cautious tone. Both Rothschild & Co and RBC reiterated Neutral or equivalent ratings last week, suggesting the stock is approaching fair value after its recent run.That does not imply a bearish outlook, but it does suggest the easy money might already have been made, and the risk/reward profile isn’t as attractive as it once was.Wells Fargo Could Be The Late Bloomer of The GroupWells Fargo & Co (NYSE: WFC) has taken a bumpier path this year. The stock is up about 31% YTD and more than 10% over the past month, managing to reach all-time highs despite a handful of headline earnings misses earlier in the first half of the year. That resilience has not gone unnoticed. The team at Evercore ISI recently reiterated its Outperform rating on Wells Fargo and raised its price target to $107, implying upside of more than 15% from current levels. Compared to Citigroup and Goldman Sachs, Wells Fargo has lagged considerably in 2025 as it works through regulatory constraints and operational clean-up.But that underperformance is now starting to look like an opportunity. If those headwinds continue to ease into 2026, Wells Fargo arguably holds the most upside potential of the three bank stocks. READ THIS STORY ONLINEElon’s Terrifying Warning Forces Trump To Take Action (Ad)For the everyday American who’s worked hard to build their nest egg, Trump preserved a IRS loophole that allows you to protect your retirement savings before billions in American wealth are lost. Download Your Free 2026 Wealth Protection Guide and execute the simple steps to protect your future. GET THE FREE GUIDEThe Night Owl is a financial newsletter that provides in-depth market analysis on stocks of interest to individual investors. Published by MarketBeat and Early Bird Publishing, The Night Owl is delivered around 9:00 PM Eastern Sunday through Thursday. If you give a hoot about the market, The Night Owl is the newsletter for you.  View as a Web PageIf you need assistance with your subscription, don’t hesitate to contact our U.S. based support team at contact@marketbeat.com.Unsubscribe Copyright 2006-2025 MarketBeat Media, LLC. 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