June 6, 2023 | Daily JAM, NVDA, Videos |
Today’s Trend of the Week is Should You Sell Nvidia? Nvidia (NVDA) has had a great run. Recently, post-earnings, the stock shot up even higher It’s up 44% in the last month, 67% in the last three months, and 166% year to date. The PE on trailing earnings is 203. (The average market PE for a well-liked growth stock is closer to 25-28.) That makes this an making this extraordinarily high-priced stock. However, the forward PE is “just” 84 times projected earnings per share over the next 12 months. That’s below very hefty projected earnings growth. The current growth projection for the second quarter is at 302%; the following quarter is 286%; and for the year as a whole, 132%. So at 84 times projected earnings this isn’t extraordinarily expensive–as long as those projections come through. It’s very hard for a company, even Nvidia, to maintain this kind of growth for very long. Growth in 2024 is only projected at 34%. If we get down to 50% or 30% growth, the market is likely to wake up one day and feel this is a really expensive stock. So keep an eye on guidance for 2024 as we get closer to 2024. (A rule of thumb is that Wall Street analysts tend to look about 6 months ahead in their buy/sell/hol calls on a stock. For now, hold on. Until you see growth projections start to drop below 100%. At that point, even if a stock growing by 50% a year is an amazing future story, a door might be a good thing to find.
June 1, 2023 | AMAT, AMD, CVS, Daily JAM, Dividend Income, EMR, GOOG, ILMN, Jubak Picks, Long Term, MSFT, NVDA, Top 50 Stocks, TSM, Volatility |
Artificial intelligence really is a paradigm-breaking, transformative technology. Right now, investors are so enthusiastic about the sector, especially the obvious leader Nvidia (NVDA), that we’re looking at a potential bubble that will collapse with much gnashing of teeth and I-told-you-so “wisdom” casting doubt on the reality of the entire endeavor. I think a bubble is indeed possible. Nvidia did trade at a trailing twelve-month price-to-earnings ratio of 196 on May 31, after all. But I think you do want to own the sector now–because the breaking of the bubble, if it does break is, in my opinion, two quarters or more away. And you want to own the sector for the long run–say, 10 years or more–because it is such a game changer for so much of the economy. But what to own? I’ve put together a list of the 10 stocks that I think are the best way to participate in the AI gold rush.
May 24, 2023 | Daily JAM, NVDA, Top 50 Stocks, Volatility |
Nvidia (NVDA) shares were up 19.68% at 4:45 p.m. New York time today, May 24, after the company reported beating analyst estimates on earnings and revenue. The company also told analysts to expect second-quarter revenue way, way above pre-announcement projections. For the three-month period ending April 30, Nvidia earned $1.09 per share, excluding one-time items, as revenue came in at $7.19 billion. Analysts were looking for the company to report earnings of 92 cents a share and $6.28 billion in revenue.
May 3, 2023 | Daily JAM, MSFT, NVDA, Videos |
Today’s topic is Is This the End of Momentum? One Last Momentum Blowout. This has been a great market for very specific stocks. We’re seeing a very narrow momentum market. A few stocks are overperforming the index and propping it up. An example is Meta Platforms (NASDAQ: META), formerly known as Facebook. Meta is up 102% this year and it’s up about 14% in the last month. The S&P is up 9.5% year to date and just 1.5% in the last month. We’re seeing a large divergence between the index and a narrow group of a few rallying stocks, like Meta, Netflix, Microsoft, and Nvidia. These stocks are outperforming the index, but they’re up based on very recent history. Meta’s recent earnings jolted the stock upwards, but it’s still a company that is bleeding money to develop its virtual reality products, with billions of dollars ($13.7B in 2022) lost by its Reality Labs program. The company had staked its future on the Metaverse but has yet to create a viable product from the project. As the momentum of these few stocks starts to slow, Meta could take a big hit because of these fundamental factors. In my opinion, we’re near the top of this momentum market and it’s time to start taking profits from companies like Meta, Microsoft, and Nvidia.
March 30, 2023 | ADBE, Daily JAM, Jubak Picks, MSFT, NVDA, Top 50 Stocks, Volatility |
In Step #3 of my Special Report: 5 Moves for the Next 5 Months, on March 24 I added three Big Tech stocks–Microsoft (MSFT), Adobe (ADBE), and Nvidia (NVDA) to my Volatility Portfolio ahead of earnings season. My theory, explained in that post was that we were facing a tough earnings season for most stocks and that reliable earnings growth from Big Tech would make those stocks look like a safe haven in a period when the Standard & Poor’s 500 as a whole was projected to show a drop in earnings. (I also owned up to my mistake in selling Nvidia back on February 16. That was just wrong. More on why I was wrong and why I’ve changed my mind on that in a post tomorrow or so.)
February 20, 2023 | ADBE, Daily JAM, Jubak Picks, Long Term, MSFT, NVDA, Special Reports, Top 50 Stocks |
You can understand the gold rush: One AI stock is up 105% (and 78% in the last month) in 2023 as of the February 17 close.
But are shares of that company, the software artificial company C3A (AI), the stock you want to own, or is this stock simply a beneficiary of hot money jumping on anything that sounds like artificial intelligence? As one market observer put it on Seeking Alpha recently, “The ticker is more valuable than the company.” This doesn’t mean that the current revolution in artificial intelligence isn’t real. And here I give you my 7 picks for investing in the latest AI revolution
February 16, 2023 | CHPT, Daily JAM, DIS, EVGO, Jubak Picks, Millennial, NVDA, Top 50 Stocks, TWLO, Volatility |
The rally on February 15 sure looked like a speculative blowout of the kind that often signals a market top. For me, it was the last straw and I’m selling into the rally. This post tells you what I’m selling and how I arrived at these decisions. But first, a few words on Wednesday’s move.
December 16, 2022 | Daily JAM, Morning Briefing, NVDA, Top 50 Stocks |
Wall Street analysts had begun to cut earnings estimates for 2023 even before this week’s Federal Reserve meeting. The Fed’s signal that it would raise interest rates higher and for longer than anticipated–and Fed chair Jerome Powell’s very tepid support for the belief that there wouldn’t be a recession in 2023, is leading Wall Street analysts to cut forecasts again. I mean how great will revenue and earnings growth be in 2023 if the economy grows at the Fed’s projected 0.5%? And a big chunk of that thinking on Wall Street is asking now if that projection isn’t the optimistic end of a range that on the downside would put the U.S. economy into an actual recession. Which puts downward pressure on stock prices and makes it very difficult right now to put a fair value on any stock. The Standard & Poor’s 500 closed down another 1.11% today, December 16. The Dow Jone Industrial Average was off 0.85%. The NASDAQ Composite closed lower by 0.97%. And the NASDAQ 100 ended down 0.63%. Take a look at how this works for a stock such as Nvidia (NVDA).
November 13, 2022 | Daily JAM, NVDA, WMT |
Expect a ton of earnings reports as third-quarter earnings season hits its stride. A few could even move a sector or maybe even the market as a whole. The biggie for the week, I’d argue, is Nvidia (NVDA) on Wednesday, November 16, after the market close. But we’ve also got big news in the retail sector with Walmart (WMT) due to report on November 15.
October 10, 2022 | AAPL, AMD, ASML, Daily JAM, Jubak Picks, NVDA, Top 50 Stocks, TSLA |
If you liked the Trump administration’s trade war with China, you’ll love the Biden administration’s new, more dangerous, escalated version. Rather than slapping tariffs on Chinese goods, and inviting retaliatory tariffs by China on American products, the Biden administration war limits the same of advanced semiconductors and chip-making equipment to Chines companies. The action is aimed straight at the heart of China’s efforts to build its own chip industry. And it plays right into a belief, stoked by China’s President Xi Jinping, that China is the victim of a Western plot to prevent the country’s rise to its rightful place in the global order. And the opening blows in this trade war come just as President Xi aims to be installed as China’s newest preeminent leader with a status near that of Mao. I don’t know what the retaliation from China will be, but it is unlikely to stop with a few restrictions on how U.S. companies, such as Tesla (TSLA) and Apple (AAPL) operate in China. The situation is so dangerous because it is so uncertain and so open-ended.
October 6, 2022 | AMD, Daily JAM, INTC, NVDA, Top 50 Stocks |
After the close today October 6, Advanced Micro Devices (NASDAQ) announced that its preliminary estimate of revenue for the third quarter would be just $5.6 million. That’s well below Wall Street forecasts of $6.71 billion.
September 29, 2022 | Daily JAM, NVDA, Top 50 Stocks |
My one-hundred-and-ninetieth YouTube video: “Quick Pick Nvidia” went up today. This week’s Quick Pick: Nvidia (NASDAQ: NVDA). I believe Nvidia will be the dominant chip stock for the next decade–but the stock is struggling during this bear market and the shares were down 58% year-to-date as of September 26. The company has come out with a new line of chips, the GeForce RTX 4000 Series, which offers a 2-4x performance boost over the last generation chip. But in order to get that boost, early reviews indicate, a computer game has to use Nvidia’s DLSS software. Currently, almost no games use DLSS. So Nvidia finds itself in a build it and they will come situation. (“Build it, and they will come,” as James Earl Jones said in Field of Dreams.) Nvidia now awaits the uptake from companies that will be using this chip of the future. Because this product doesn’t “do anything” right now, Nvidia’s upcoming earnings on November 16 won’t reflect this new product. In the short-term, I look for the stock o sell off further on the earnings report. In other words, a better buying opportunity still awaits those who can be patient.