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☕ Nvidia’s earnings will rock markets one way or another

Feb 19, 2024

Good morning! 👋

The markets are closed for President’s Day and I’m out the door to Lost Wages, err, Las Vegas shortly for the MoneyShow where I will be speaking, teaching and more for the balance of the week.

I hope to see YOU there!

First though, I stopped by FBN for a quick conversation with the fabulous Ashley Webster about how I see earnings playing out over the next few days. (Watch)

There are some big names on deck.

NVDA – No question, the single most important call of the week.

People laughed in my face last year at $150 when I called it one of the most underrated stocks on the street and spoke about AI’s launchpad.

Now, it’s ~$726 and has returned 397.09% since 1/1/23 according to Koyfin. Any investor following along as directed has had the opportunity to harvest several 100% winners. Several. Upgrade to Paid

People are going to try their dangdest to paint what’s happening as a one-off but that’s a mistake. Customers will buy every last chip the company can make for the next few years.

Why people continue to underestimate AI is beyond me.

If you had purchased just 100 shares at the end of 2018 your adjusted cost would be around $33 per share. And $72,600 ... up 2,100% according to The Street. [Updated 2/18/24] The SPY has returned a healthy but far less 116.88% over the same time period.

Nvidia is now one of the world’s most valuable companies, behind only Apple, Microsoft, and Saudi Aramco with a market capitalization of ~$1.8T.

I expect strong numbers and strong guidance, perhaps $20B+ in revenue versus last year $6.1B and earnings north of $4.50 unless there are special charges.

NVDA took out my $700 target (set last year) which means I’m batting 1 for 2... just the split remains. Now, I’m thinking $1,000 or a split within the next 12-24 months.

This is a rare instance, btw, when buying ahead of or after an anticipated split makes no difference, at least to my way of thinking anyway.

Do watch for a drop if the go-fast crew decides to tank prices just ahead of or after earnings and plan on using any weakness to your advantage.

Keith’s Investing Tip: Contrary to what many people believe, investing doesn't have to be complicated. In fact, one of the simplest, most consistently profitable paths you can take is to learn to invest on the right side of economic trends... like AI.

Home Depot/Lowes

I believe both companies are under pressure and will continue to be so as long as consumers are in “fix it” mode. What I mean by that is that they’re buying sinks and closet kits, not renovating the entire bathroom or bedroom. Contractor loadouts – at least those I’m seeing – appear to be smaller.

Walmart

Here, too, the consumer is key. The company continues to mount an impressive challenge to Amazon. I’m expecting strong numbers, particularly on the e-commerce side. Moreover, if the company can avoid a Target-like inventory mistake, I there’s a good case to be made that the upcoming split will play very well.