I expect the market reaction to Nvidia’s (NVDA) earnings report, to be released after the close on Wednesday, February 21, to tell investors a lot about the short-term direction of this stock market. We’re likely to learn more, however, from the reaction to an Nvidia beat rather than from an earnings miss.
Can you hear the barkers yelling to the crowd? It’s Wall Street analysts rushing to raise their target prices for Nvidia (NVDA) ahead of next week’s quarterly earnings report. On February 21, after the close, Nvidia is expected to report earnings of $4.18 share, up from $0.65 a share in the quarter a year ago, on revenue of $20.5 billion. And even though the stock is up 47% for 2024 as of the February 15 close and up 219% for the last year, Wall Street analysts are rushing to increase their target price on the shares.
It’s important to remember exactly how young artificial intelligence is as a market product. I certainly don’t think it’s possible to project the long-term winners on either the software or hardware side. Remember the days when Apple (AAPL) thought it was worth buying a Super Bowl add to urge consumers to smash the IBM PC empire? But I do think the hardware road map is petty clear for the next two to three years. Which is why I’m adding shares of Advanced Micro Devices to my portfolios tomorrow.
In November global chip sales rose for the first time in more than a year. Global semiconductor revenue added up to $48 billion in November, a 5.3% increase from a year earlier, according to the Semiconductor Industry Association. Sales rose a more moderate 2.9% from October. But the good news didn’t extend to all chip segments.
Here are the first 8 picks for my GREATER Growth Stocks Special Report. More on the way.
On Monday Nvidia (NVDA) hit an all-time high. For 2023 through November 17, Nvidia and the other 6 stocks in the Magnificent Seven–Apple (AAPL), Alphabet (GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), and Tesla (TSLA)–have gained more than 70%. The other 493 stocks in the Standard & Poor’ 500 are up 6% for that same period.
Nvidia (NVDA) beat Wall Street expectations again. After the market close today, November 21, the company reported adjusted earnings per share of $4.02 on revenue of $18.12 billion. Analysts had projected adjusted earnings per share of $3.36 and revenue of $16.1 billion.
Nvidia’ earnings report after the close on Tuesday, November 21, will be the big event of the short Thanksgiving week.
a lot of individual stocks are cheap right now, I’d argue. 180 of the 500 stocks in the S&P 500 trade now at the same or lower price that they commanded a year ago. And for many individual stocks the performance is even worse. For example, Luminar Technologies (LAZR), a maker of LIDAR safety and navigation equipment for cars, is down 40% in the last three months. Albemarle, the world’s leading supplier of lithium, is off 27% in the last three months. Nidec (NJDCY), a Japanese maker of small electric motors and electric vehicle drive trains, is down 13% in the last three months. I’d argue that these and the rest of the 10 Contrarian bargain stocks that I’m going to recommend in this Special Report share a number of characteristics that have led to their losses over the last few months or longer.
I’m going to take advantage of today’s pop in Nvidia (NVDA) to sell the shares out of my very short-term Volatility Portfolio tomorrow, Tuesday, October 2. The shares closed up at the close today at $447.82, a gain of 2.95% on the day. I initiated the position in the Volatily Portfolio on Mach 25, 2023. It was up 66% as of the close today So why sell Nvidia here?
So what do you do with your portfolio for the rest of 2023? And what’s your best strategy to be prepared for 2024? In Part 1 of this Special Report I laid out the 10 developments that I thought would drive the financial markets for the rest of 223 and into 2024. Today, in Part 2, I’m going to give you the first 2 of 10 moves to take–with as much detail and as many specifics as possible–that you should be making now to position your portfolio for the uncertainties of the last quarter of 2023.
