|Bid||31.86 x 4000|
|Ask||31.87 x 4000|
|Day's Range||31.47 - 32.09|
|52 Week Range||16.03 - 35.55|
|Beta (3Y Monthly)||3.18|
|PE Ratio (TTM)||176.05|
|Earnings Date||Oct 22, 2019 - Oct 28, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||33.19|
After downgrading the chip sector almost a year ago, brokerage firm Raymond James now is seeing some attractive semiconductor stocks. They include ON Semiconductor and NXP Semiconductors.
NVIDIA stock’s downtrend seems to be ending. NVIDIA’s revenue is growing sequentially, driven by strong demand for laptop GPUs and game console processors.
The companies on the front lines of the trade war are getting a bit of a reprieve to start the week, following the announcement from Commerce Secretary Wilbur Ross that Chinese device maker Huawei will get another 90 days to buy from American suppliers. One big U.S. tech name that counts Huawei as a customer is Advanced Micro Devices - shares are getting a boost from the news cycle Monday, up 2.6% just before noon. While shares spent most of 2019 in a well-defined uptrend - one that sent a clear-cut buy signal in mid-June that was followed almost immediately by a push to new highs - things have changed as trade war developments and recession fears entered the market.
Nvidia Corp. headed back toward a $100 billion market cap Friday morning, after detailing earnings that showed its core business is back on track after a crypto-mining-influenced crash over the past year.
Friday was a big day for investors. On Thursday, we said bulls would have liked to see a bigger rebound following Wednesday's brutal beating. But Friday proved strong, with U.S. stocks posting impressive gains across the board. * 10 Cheap Dividend Stocks to Load Up On Let's look at a few top stock trades going forward.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Top Stock Trades for Tomorrow: Advanced Micro Devices (AMD) Advanced Micro Devices (NASDAQ:AMD) has been all over the map lately. Luckily, we're getting new levels to work with on the charts.For now, the 100-day moving average is buoying the stock, with short-term uptrend support also helping to guide AMD higher. Ideally, bulls will see shares reclaim prior uptrend support (blue line), as well as the 20-day and 50-day moving averages.If AMD stock can do that, a test of resistance between $34 and $34.50 is on the table. If it can't reclaim these levels, they may act as resistance going forward. That puts the 100-day back on the table.If it falls below the 100-day, the $29.21 lows and the $27.65 lows are possible. Bank of America (BAC)Is Bank of America (NYSE:BAC) a safe buy? It's hard not to like the stock down here. Not only has this $26.25 to $26.50 area proven to be solid-range support for all of 2019, but BAC stock has put in three straight days with almost identical lows.The fact that these lows held gives longs a great risk/reward situation. $26 can be a stop out point for longs, while they look for a rebound higher. $27.50 is a conservative target, but $28 doesn't seem to be out of the picture.A rebound up to the 50-day and 100-day confluence near $28.75 also seams reasonable. Remember, this stock was at $31 a few weeks ago and these big shakeouts have usually been good buying opportunities. Near range support, it's a worthy risk. Facebook (FB)Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is holding trend right now, while Amazon (NASDAQ:AMZN) has quite a bit of support nearby too. Facebook (NASDAQ:FB) though? Shares are looking suspect at the moment.So far, support is holding near $179 to $180, but downtrend resistance (blue line) is squeezing FB lower. Falling below most of its major moving averages isn't helping the bulls' case either.Over downtrend resistance will help, but for FB stock to really have upside potential, it needs to clear its 50-day and 100-day moving averages. Below $180, and range support at $160 is in play. General Electric (GE)What a wild ride this one has been on the past two days. Shares of General Electric (NYSE:GE) were pulverized on Thursday after a whistleblower cited concern over the company's accounting. The CEO shot back and put his money where his mouth is, buying $2 million worth of stock.The recent lows held well, as GE stock charges back toward $9. Now though, it's key to see if General Electric can reclaim the $9 to $9.25 area or if this zone acts as resistance. Deere (DE)Deere (NYSE:DE) stock is up almost 4% heading into the weekend after the company reported its quarterly results after the close. I don't love the set up in Deere, particularly given the current trading environment. However, shares did test roughly the same low for three straight sessions, all of which held.Anyone taking a long flyer on DE should note that level -- approximately $141 -- as their potential stop out mark. If shares break out over short-term downtrend resistance (blue line), a run to the 200-day is possible. If $142.50 holds as support, bulls can stay long.A breakdown below $141 could send DE stock down to $132.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long BAC, AMZN and GOOGL. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post 5 Top Stock Trades for Monday: AMD, BAC, FB, GE, DE appeared first on InvestorPlace.
Despite a rough few weeks in the tech sector, graphics chip maker Nvidia (NASDAQ:NVDA) may be set for a bounce. Reporting both revenue growth and an increased net income, the Nvidia stock price rose 7% after the company released second-quarter earnings today that beat analysts' estimates. And those estimates were already on the optimistic side.Source: Shutterstock Yet, despite the strong operating performance, NVDA stock has somewhat lagged the market for most of the year, and even now, with this surge, isn't impressing too much. Nvidia stock is now trading at $159, showing about an 19% increase for the year. That compares to the 15% gain year to date for the S&P 500 Index and 20% for the Nasdaq Composite.Nvidia reported adjusted earnings per share of $1.24 for its fiscal second quarter, versus the Wall Street consensus of $1.15. Revenues increased slightly from $2.222 billion in the first quarter to $2.58 billion for the quarter ending July 29. The overall improved performance suggests that the recent slump in orders of high-end graphic chips has eased. The chip market may be headed towards a revival in demand from video game makers as well as large data centers.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSo are we set for a longer-term rebound in NVDA stock? The fundamentals certainly look strong. * 10 Cheap Dividend Stocks to Load Up On Here are three reasons why Nvidia may be a buy after the recent solid earnings release. Strong Revenues for Nvidia StockRevenues across all business units increased from the previous quarter, according to Nvidia's earnings release. Chief Executive Officer Jensen Huang explained on the earnings call that the recent slowdown in sales of video-gaming chips and processors for artificial intelligence computing was temporary. In recent quarters, revenues had shrunk slightly for three straight quarters. Huang attributes this to the fact that customers had been working through stockpiles of unused inventories.But now, Huang sees that customers are starting to buy again. The Hugh Bet on AI May Soon Pay OffThe often overlooked driver of future NIDIA stock price is it's up and coming product offerings in artificial intelligence (AI), a gargantuan market that is only beginning to take off. Nvidia's is carefully investing in domination in the AI market, which may be worth over $15 trillion by 2030.Indeed, the AI sector faces brutal competition, particularly from rival chip markets such as Advanced Micro Devices (NASDAQ:AMD) and the giant Intel (NASDAQ:INTC), who are all aggressively investing in offering products in the AI market.However, the AI market will grow to such an enormous size, that there will undoubtedly be room for more than one winner. "The competition should show up with something," CEO Huang said. "AI is going to be a large market for everybody, and the growth is ahead of us. The bottom is behind us."To some extent, NVDA has a bit of a first-mover advantage. For example, Nvidia pioneered the use of graphics chips to run AI software in the data centers that offer cloud computing. Its line of GeForce processors have proven to be the top choice for PC gamers demanding the highest performance and the highest resolution. Timing in Chips is Everything -- and Now May Be the Time for NVDAThe chip market is notoriously cyclical. Between the specter of a trade war with China, concerns about an upcoming consumer recession in the US, to the feast or famine culture of computer hardware supply chain - particularly in the video gaming industry -- chip stocks are highly volatile.For example, last year, Nvidia stock dropped from a high of $292 in September down to $129 just three months later. More recently, the NVDA stock price went from $178 in late July to $147 just before the earnings release. At the present level of $149, Nvidia stock has probably bottomed out for the time being. With whatever doubts about a chip market slow down behind it, the stock may now be at the beginning of an upcycle.Certainly, Nvidia is operating in a tough market with formidable rivals. However, most all the bad news about a market slow down, and aggressive pricing by its rivals is now baked into the price. Investors in chip stock focus on cycles and are well prepared for a ride. For Nvidia stock, we may have passed the market bottom and set for an eventual upswing.As of writing, Theodore Kim has no exposure to any of the above-mentioned stocks. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post With Solid Q2 Results, Nvidia May Bounce Back appeared first on InvestorPlace.
As both Nvidia and AMD compete to create the next best AI and cloud computing GPUs, the tech is only going to proliferate in performance and both companies stand to gain.
NVIDIA (NVDA) stock soared 6% in today’s trading session as its Q2 earnings for fiscal 2020 beat estimates. However, its guidance missed estimates.
Shares of Micron (NASDAQ:MU) have been volatile, which is no surprise given the current landscape of the stock market right now. Take virtually any news headline and it's easy to see its impact on the stock market.Source: Shutterstock The yield curve, slowing national economies like Germany, the market and currency implosion in Argentina and of course, the trade war, can all impact stocks. But the trade war is the big one for Micron stock because the conflict has a huge impact on semiconductor companies.In the case of MU, sometimes the impact of the conflict is direct and other times it's indirect. But if MU's semi, memory and chip peers -- like Applied Materials (NASDAQ:AMAT), Lam Research (NASDAQ:LRCX), Advanced Micro Devices (NASDAQ:AMD) and Western Digital (NASDAQ:WDC) -- are struggling, there's a good chance that MU stock will struggle too.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMoreover, supply/demand issues have weighed on memory manufacturers like MU as well. That's why we've slowly seen estimates for MU's top and bottom lines dwindle over the last nine months. * 10 Cheap Dividend Stocks to Load Up On There has been optimism that MU and its peers have reached a bottom. If that's the case, it would be quite a powerful positive catalyst for MU stock price. Valuing Micron StockThe one thing investors have always pounded the table on when it comes to MU is its low valuation. But that low valuation is there for a reason; specifically, MU operates in a boom-bust business cycle. When the climate is right, its sales and earnings surge. But when demand dries up or supply builds too much (or both), its earnings and revenue are hammered.No one wants to pay an average price=earnings multiple for that, let alone a premium. Some analysts, however, have said that if Micron stock traded with the same multiple as the S&P 500, then MU stock price would be much higher than it is.But modeling a price target on a stock based on the assumption that investors will dramatically raise its valuation is a fool's game. That doesn't happen often and when it does come to fruition, there's no way of knowing what the final valuation will be. Investors really need to analyze each stock based on its own merit and history.In Micron's case, it has a low valuation, and that probably won't change unless a modification of its underlying business alters its outlook. Analysts, on average, expect MU to generate earnings per share of $6.22 this year, leaving Micron valued at 6.75 times the average EPS estimate.However, the average EPS estimate for 2020 is just $2.50. If the average estimates prove correct, MU's EPS will sink 60% year-over-year in 2020, and MU stock is trading at 16.8 times its 2020 EPS. Moreover, the average estimates call for MU's sales to fall 24% this year and another 15% in 2020.The average estimates for 2020 may be too bearish, but that emphasizes exactly what we're talking about: Micron's business is too volatile to command a higher valuation. Trading MU Stock Click to EnlargeThe wild swings of MU's earnings and revenue are too much for many investors. For those who do want to buy Micron stock, perhaps it's best to accumulate it when the news has worsened considerably and sell the shares when it seems like blue skies for MU.On Tuesday, MU stock fired higher, briefly eclipsing $45. However, the prior resistance zone between $44 and $45 held it in check. It didn't help that Micron's 38.2% retracement level is near $44 as well, while its declining 20-day moving average was $43.11.We have been highlighting this resistance zone for months now, and there's currently a lot of resistance in this area.The rhetoric about MU is improving, but investors are still pretty cautious on the name. Luckily for the owners of Micron stock, the charts have somewhat definitive levels.Bulls either need to see Micron stock price overcome its resistance or get cheaper before buying Micron stock. Bulls who are waiting for the shares to overcome resistance should look for a close north of the $44-$45 zone. If that happens, MU stock can reach its July highs near $49.Aggressive bulls waiting for MU to get cheaper may feel confident near $41. There, MU stock price will be near the 50% retracement level and the 50-day moving average, which is trending higher. Conservative bulls may wait for a correction down into the $39 area. There it will encounter prior support from July, as well as the 200-day moving average. Further, the 61.8% retracement level near $38 should help boost MU stock.In either scenario, buyers need to use extreme caution below $38. If this level give way, MU can decline into the low- to mid-$30s.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post A Low-Risk Way to Trade Micron Stock appeared first on InvestorPlace.
The market fell on August 14 when China threatened to retaliate against US tariffs. This news hit semiconductor stocks, which depend on China for revenue.
The rhetoric regarding the inherent war between central processing unit makers Intel (NASDAQ:INTC) and Advanced Micro Devices (NASDAQ:AMD) has taken on a clear flavor of late. Intel, and by extension INTC stock, is in trouble.Source: JHVEPhoto / Shutterstock.com Underscoring that paradigm of late is last week's official launch of AMD's new server chip, EPYC Rome. It's not only the world's first 7-nanometer processor, but the rumor is that some big names like Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) are already using the high-powered tech. Intel's first 7-nanometer hardware is still a couple years off.Oh yeah -- the EPYC Rome CPU is also considerably cheaper than Intel's most comparable data center processor chip line call Xeon.InvestorPlace - Stock Market News, Stock Advice & Trading TipsPast the sheer fascination with the fact that Advanced Micro Devices seemingly came back from the dead to leapfrog the dominant name in server chip technology, however, lies another reality. As impressive as EPYC Rome may be, Intel's still got something bigger and better in the works. Not Your Father's IntelThere's no denying it. Intel got caught being lazy and complacent. Advanced Micro Devices was supposedly a has-been, leaving the CPU market wide open for Intel. Since Lisa Su took the helm in 2014, AMD is back from the dead. * 10 Cheap Dividend Stocks to Load Up On Nothing lights a fire under a company like a little pressure though.Granted, research and development of technologies like computer processors is neither cheap, nor quick. Intel is still working on an effective answer to the 2016 launch of AMD's Ryzen CPU line, which offers almost as much computing power as Intel's comparable wares at the time, and at a much lower price. In the meantime, Intel continues to chase other debuts of Advanced Micro Devices hardware, though not necessarily all of them. Intel isn't looking to respond to AMD's "Threadripper" CPU.The launch of AMD's EPYC 7002 series of 7-nanometer server processors earlier this month underscored the depth of Intel's distance behind AMD. After multiple delays, Intel doesn't expect to offer its first 7-nanometer processor until 2021.It's all very unlike Intel. This Competition May Not MatterMuch of the value of technological breakthroughs like 7-nanometer CPUs is leveraging them as publicity tools. Undoubtedly, Advanced Micro Devices has gotten much mileage from being able to say it was the first to reach the 7-nanometer milestone.Companies and consumers alike just want solutions that work well, however they work.Even with its less-thrilling 14-nanometer "Coffee Lake" processors and its 10-nanometer "Ice Lake" CPUs, Intel is making highly marketable products right now.Admittedly, with the inherently slower speeds of 10-nanometer processors, Intel has to do everything else right on a computer's or server's (or a tablet's or a smartphone's) main board to extract comparable performance. But, it is doing that. Its Project Athena, for instance, is an overarching effort to make laptops and mobile devices faster not with a more powerful CPU, but by building a device from the ground up with speed and performance in mind.The device has already mapped out how it can best handle multiple files and apps, for instance.AMD hasn't thought as much beyond the development of a powerful processor. In fact, it may not have even given fully adequate thought to the development of its 7-nanometer tech. Did AMD Rush 7-Nanometer Development?It's only anecdotal, but a closer look at the performance of AMD's Ryzen 3000 series suggests not every core of the CPU is reaching the advertised operating speed.Some are wondering if AMD's rush to get a 7-nanometer chip on the market could be the culprit. Others are wondering if 7-nanometer tech is even worth the effort. As ExtremeTech's Joel Hruska wrote late last month, "Higher silicon variability [stemming from the 7-nanometer foundry process] is going to demand a response from software. The entire reason the industry has shifted towards chiplets is that building entire dies on 7nm is seen as a fool's errand…"If that's the case for other 7-nanometer hardware like the EPYC Rome, the actual performance of these new devices may disappoint some users.According to Hruska, the physical limitations involved in manufacturing silicon-based CPUs cause the bulk of the performance bottleneck. He says that future performance improvements won't come on the hardware fronts.That bodes well for Intel's Project Athena, which aims to address more feasible performance enhancements. The Bottom Line for INTC StockDon't misread the message: Intel dropped the ball. It's also willingly wading into projects that have a questionable payoff.It's already competing with AMD on the CPU front. Intel has recently begun work on discrete graphics cards that will go up against Advanced Micro Devices' graphics processing units as well as those made by Nvidia (NASDAQ:NVDA). The company is also planning a line of dedicated gaming PCs through a program currently called Phantom Canyon. There's an established market for both, but neither are necessarily aligned with Intel's core competencies. As such, they may prove more distracting than fruitful.Still, Intel is hardly being forced into the retreat mode some investors and pundits have suggested.That doesn't make INTC stock bulletproof -- market-wide weakness could still inflict damage. Assuming the global economy doesn't slip into a full-blown recession though, dips like the one Intel stock just made could continue to be great entry points.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Intel Lost the 7-Nanometer Battle, But INTC Stock Is Still a Buy appeared first on InvestorPlace.
On Aug. 15, Nvidia (NASDAQ:NVDA) reported Q2 of fiscal 2020 earnings. Investors overall seemed pleased with the results. After hours, NVDA stock went up over 5% to close at $157.09.Source: Shutterstock Today, let us take a closer look at Nvidia stock's results to see if long-term investors may find value in NVDA shares around these levels. Nvidia Stock's Q2 EarningsNvidia is a pioneering maker of graphics processing units for gaming and professional markets. NVDA sells two main products: graphics processing units (GPU) and Tegra processors. GPUs accelerate central processing units (CPUs), boosting the performance of video and graphics and improving computers' overall output.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Cheap Dividend Stocks to Load Up On Analysts are concerned about the recent slowdown in the chip sector coupled with worries over U.S.-China trade wars. However, globally there are important growth areas, such as artificial intelligence (AI), autonomous vehicles, 5G, as well as high-performance computing and gaming. These technologies depend on the bigger graphics processing capabilities of Nvidia, Intel (NASDAQ:INTC) and Advanced Micro Devices (NASDAQ:AMD). All three companies work hard to gain market share.During the quarter, NVDA stock's revenue rose 16.2% sequentially but fell 17.4% year-over-year (YoY) to $2.58 billion. Similarly, the adjusted EPS rose 40.9% sequentially but fell 36.1% YoY to $1.24.In Q2, Wall Street was expecting Nvidia to report revenue of $2.55 billion and adjusted EPS of $1.15.Over the past several quarters, Nvidia stock has experienced a steep decline in revenues post-crypto bust. Therefore, the better-than-expected results pushed up the stock price after hours.Nvidia stock is trading at a forward PE ratio of almost 29. In comparison, Intel stock's forward PE stands at about 11. Therefore, going forward, shareholders will want NVDA management to deliver even stronger results so that the stock price warrants the rich valuation metric. How NVDA Stock's Important Segments ReportedIn the earnings report, analysts paid attention to five segments that drive its revenues: gaming, data center, professional visualization, automotive, and edge computing.For years, NVDA has been a leader in the competitive graphics-card market. However, in recent months the battle for market share between Nvidia and AMD in that segment has intensified. As AMD launches its Navi cards, AMD's GPUs will likely take market share from NVDA in the video-game chip sector.Similarly, data center competition from Intel has increased. Nvidia recently spent $6.9 billion to buy the data center networking company Mellanox. In other words, Nvidia is telling the markets that it is not just going to be a GPU company any more.In Q2 the group's revenue data center revenue rose 3.3% sequentially but fell 13.8% YoY to $655 million. Nvidia's data center business revenue missed analysts' consensus estimate of $668.5 million.Gaming accounts for about 40% of Nvidia's total revenue. NVDA stock's sales from the gaming segment went up by 24.5% sequentially but fell 27.3% YoY to $1.31 billion. Nonetheless, the segment revenue beat the consensus estimate of $1.3 billion.In recent months, investors have been worried about the company's growth outlook, which is mostly based on its GPUs for gaming and artificial-intelligence servers. Nvidia's EPS and Nvidia stock price are very closely linked to the sales trends of its GPUs.For Q3, NVIDIA expects to book revenue of $2.9 billion, plus or minus 2%. That number is below the projected $2.98 billion for the quarter. Nvidia Stock Technical Charts Signal More VolatilityOn Aug. 15, before reporting Q2 earnings, NVDA stock closed at $148.77. Over the past year, Nvidia stock price is down about 40%, and the shares have been quite volatile. Its 52-week range has been $124.46-$292.76.As a result, the technical outlook of NVDA stock has been damaged. Its short-term chart still looks weak, and Nvidia stock price looks poised to exhibit even further volatility in the near-term.NVDA's momentum indicators, which describe the speed at which stock prices move over a given time period, have been in oversold territory for some time. Therefore, a relief rally is expected and likely to come following the quarterly results. My initial expectation is for NVDA stock to race toward $170, where it is likely to have significant resistance.However, a couple of day's move does not make a definite trend. More buy signals based on momentum indicators need to be conﬁrmed before Nvidia stock can become a long-term buy from a technical standpoint.It is important to remember that Nvidia is a momentum stock. Therefore, if you are worried about what would be a viable entry point into NVDA shares, I'd suggest that long-term investors wait until Nvidia stock builds a firm base between $165 and $145.If you already own Nvidia shares, you may consider hedging your position with monthly ATM covered calls. Such a strategy would enable you to benefit from an upside move and give some protection in case of profit-taking after the initial move up following the results.If the current trade tensions are swiftly resolved and the broader markets rally, Nvidia stock price could easily continue its rebound. In that case, the technical charts would need to be reevaluated. Bottom Line on Nvidia StockDespite the semiconductor industry's headwinds and cut-throat competition from AMD, there is strong demand for Nvidia's graphics processors, for use not only in video games but also in data centers and work stations. Industry experts also regard NVDA as a top player in the AI chip space, and its graphics chips are highly sought after for use in deep-learning applications.Nvidia is also exploring smart-city solutions, which exploit its proficiency in artificial intelligence and data analytics. In other words, the company is somewhat shifting its focus from processors to providing the full technical backbone for AI ecosystems. As the use of artificial intelligence and machine learning continues to rapidly grow, NVDA's AI business could expand exponentially.However, given the volatility of Nvidia stock price over the past year due to the ongoing questions about the fundamentals of the company and its sector, I would urge investors to be cautious about NVDA stock.The U.S.-China trade war has not helped NVDA, either, as China accounts for nearly a quarter of Nvidia's sales. The headwinds of the sector make many analysts wonder whether NVDA can, in the near future, regain the kind of rapid and sustained growth that investors got used to in recent years.Although Nvidia stock will likely reward long-term investors, tech stocks may remain volatile over the next few weeks. A couple of negative macro or global news headlines may drive the Nvidia stock price down. If that occurs, long-term investors will be given a better entry point in Nvidia stock.As of this writing, Tezcan Gecgil hold INTC covered calls (Aug. 23 expiry). More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post What to Know Before Jumping Into Nvidia Stock appeared first on InvestorPlace.
Dow Jones futures signal a strong stock market rally as recession fears ease. Nvidia, Applied Materials, AMD and GE were active overnight.
The Advanced Micro Devices, Inc. (NASDAQ:AMD) share price has had a bad week, falling 13%. But over five years returns...
Theoretically, an industrial giant like Dow Inc. (NYSE:DOW) should perform better than your typical growth company. As a supporting piece of evidence, DOW stock features a generous dividend yield of 6.4%. That's getting into speculative high-yield territory, yet the company has a rich heritage extending back to the early 20th century.Source: Shutterstock And right now, investors are placing a premium on defensive names. Many folks are avoiding your typical "risk-on" opportunities like Advanced Micro Devices (NASDAQ:AMD) or Nvidia (NASDAQ:NVDA). Instead, they're moving into safe-haven assets, such as precious metals. In this environment, a dividend-bearing company levered toward secular industries should appeal to the markets. Yet Dow stock hasn't benefited from this dynamic in the slightest.In fact, shares closed lower on a percentage basis during the midweek massacre than either AMD or NVDA, and that's a confusing proposition if you think about it. One of the factors that sparked the selloff was the yield curve inversion, as the payout for 10-year Treasuries slipped underneath the yield for 2-year Treasuries. Stated differently, investors are getting less reward for more time risk on the benchmark 10-year bonds.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut such a circumstance absolutely favors an investment like DOW stock. Why? It has everything to do with implications.The "2-10" yield-curve inversion doesn't make economic sense. To correct this, the Federal Reserve essentially has no choice but to pull levers to reduce the 2-year yield. But that creates demand for high-yielding assets like Dow Inc stock, especially in this period of geopolitical uncertainties. * 15 Growth Stocks to Buy for the Long Haul So, that being the case, why hasn't DOW stock acted rationally? Confusing DOW Stock has no Standout ProductsWhen I wrote about Dow stock a few months back, I noted that while the shares will always attract eyeballs for their yield, one factors bother me: the underlying company is too complicated:"Despite the much-covered DowDuPont breakup, Dow Inc stock doesn't provide a clean, linear path. Instead, the underlying company is stretched wide, featuring businesses in consumer products, packaging, industrial materials, large-scale infrastructures and technology.From a topical perspective, the separation into three entities streamlined operations for the individual cogs. Somewhat left out in the equation was that the individual cogs also have non-intuitive structures."Having broad coverage across multiple industries doesn't guarantee solid performances. In fact, it doesn't even guarantee mitigation of volatility. Just look at the longer-term charts for General Electric (NYSE:GE) and 3M (NYSE:MMM) for proof.Aside from the confusing structures, DOW stock also lacks a driving catalyst. I visited their website and browsed through their products across consumer, industrial, and packaging categories. Here's the takeaway: DOW makes very useful products. However, none of them really stand out.In a sea of sameness, Dow Inc stock risks death by a thousand cuts.Furthermore, DOW stock is a different proposition than GE or 3M. For instance, GE has a viable aviation business. It's also under new management and a fresh vision. As for 3M, I like that they found an innovative product in their "Flex & Seal Shipping Roll." This packaging invention could change the supply chain narrative for the ever burgeoning e-commerce industry.Admittedly, both GE and MMM are risky investments. But they both have at least one compelling product to offer. And both performed notably better than Dow Inc stock in Wednesday's carnage. Dow Inc Stock Needs Geopolitical ClarityAnother problem for DOW is the present geopolitical madness. Sure, this affects everybody else, too. However, management was especially worried about the turmoil.For example, in their most recent second quarter of 2019 earnings report, DOW reported a 3% decline in volume. In response management cut guidance for full-year capital expenditures from $2.5 billion to $2 billion. * 7 Safe Dividend Stocks for Investors to Buy Right Now That was in late July. After the company disclosed its financials, DOW stock dropped nearly 4%. In mere weeks, the situation has drastically worsened. That doesn't give me confidence in these shares.Of course, we can't ignore the dividend yield, as my InvestorPlace colleague Will Ashworth pointed out. But after how recent events unfolded, I'm very hesitant.Even during the height of the bull market when people viewed China more as a culinary muse than a harbinger, investors eschewed complicated companies for streamlined, agile ones. With a possible bear market on the horizon, I'm not sure if Dow stock is any more attractive.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks Under $5 to Buy for Fall * 5 Stocks to Avoid Amid the Ongoing Trade War * 7 5G Stocks to Buy Now for the Future The post Geopolitics Push a Confusing Dow Inc Stock from Bad to Worse appeared first on InvestorPlace.
(Bloomberg) -- Nvidia Corp.’s second-quarter sales and profit topped analysts’ estimates, suggesting that a slump in orders may be easing amid a revival in demand for graphics chips and parts used in data centers. The stock rallied in late trading.Revenue in the quarter that ended July 28 was $2.58 billion and profit excluding certain costs was $1.24 a share, the Santa Clara, California-based company said in a statement on Thursday. Analysts, on average, had estimated adjusted earnings of $1.14 a share on sales of $2.54 billion.Sales in all business lines rose from the previous quarter, Nvidia said, a sign the company is addressing challenges that had stalled growth. Chief Executive Officer Jensen Huang has argued that a slowdown in orders for computer-gaming chips and processors for artificial intelligence tasks was temporary as customers worked through stockpiles of unused parts.Revenue has now shrunk from a year earlier for three straight quarters, and Nvidia forecast another decline of about 9% for the current period. Still, the 17% contraction in the second quarter was narrower than some analysts had projected, and the rate of decline is slowing. That may indicate customers are beginning to place new orders again.Gaming-chip sales came in at $1.3 billion, up 24% sequentially. Revenue from Nvidia’s second-biggest business, data center, climbed 3.3% from the prior period to $655 million.According to some estimates, that rebound in data-center revenue fell short. Wells Fargo analyst Aaron Rakers had predicted unit sales of $685 million, and he wrote in a note that the consensus estimate was about $669 million. On a conference call to discuss results, Nvidia executives faced multiple questions on the prospects for the business.On the call, Huang said demand for graphics chips used in servers was improving across the board, excluding a couple of so-called hyperscale data-center operators who don’t give Nvidia much insight into their plans. He declined to say when the business will return to annual growth, but maintained his optimism that artificial intelligence computing is the biggest-ever opportunity for his company.Nvidia’s detractors say that stiffer competition is the cause of the company’s struggles, but Huang said rivals aren’t eroding growth. Nvidia pioneered the use of graphics chips to run AI software in data centers, while Nvidia GeForce processors have been the main choice for PC gamers wanting the highest resolution action. Now, Intel Corp. and Advanced Micro Devices Inc. are offering rival products in these markets.“The competition should show up with something,” he said in an interview. “AI is going to be a large market for everybody and the growth is ahead of us. The bottom is behind us.”Nvidia shares rose more than 6% in extended trading following the report. Earlier, they slipped about 1% to close at $148.77 in New York.Net income in the second quarter was $552 million, or 90 cents a share, down from $1.1 billion, or $1.76, in the same period a year earlier.The company said sales in the current period will be about $2.9 billion, plus or minus 2%. That compares with an average analyst estimate for revenue of $2.98 billion, according to a Bloomberg survey. Adjusted gross margin will be 62.5%, Nvidia said.(Updates with CEO comments in eighth paragraph)To contact the reporter on this story: Ian King in San Francisco at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Alistair BarrFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
On Friday, chipmakers Nvidia and Applied Materials will be in focus following their quarterly results that were released Thursday evening.
Investing.com – Nvidia on Thursday struggled to regain its footing, following a drumming in the market a day earlier, even as analysts touted cautious optimism ahead of the chipmaker's results due later today.
Shares of Nvidia (NASDAQ:NVDA) have traded sideways as of late. Since my last article on the chip maker, NVDA stock has fallen from an open of $165.50 on July 2 to $156.05 share on August 13 then losing another $6 in yesterday's carnage .Source: Shutterstock So, with earnings due out today, is it time to buy NVDA stock?Not so fast! While the company has positive growth catalysts in the pipeline, the shares could be overvalued. NVDA stock trades at a discount to competitor Advanced Micro Devices (NASDAQ:AMD). But high expectations continue to be priced into Nvidia stock. With shares continuing to trade at a premium to broad line chip makers, now may not be the best time to buy into this one. Here's why I recommend some patience before making a move.InvestorPlace - Stock Market News, Stock Advice & Trading Tips What's Going on at NVDA?With NVDA stock, several factors come into play. Among them are the U.S.-China trade war and the global chip glut. But the biggest factor is the GPU war with AMD. Last month, Nvidia launched the RTX line to compete with AMD's family of Navi GPUs.Both chip makers are competing for dominance of the gaming market. Part of the battle is based on performance. But price has been the primary factor in the war. AMD may have gotten the better of Nvidia on price. After pushing Nvidia to cut prices, AMD caught them off guard again -- with another price reduction. * 7 Safe Dividend Stocks for Investors to Buy Right Now This price war underscores Nvidia's troubles in the gaming space. But what future catalysts will be a shot in the arm for the Nvidia stock price? Perhaps cloud gaming is the ticket to future growth. Nvidia's GeForce NOW enables PC gamers to stream more than 500 games from anywhere, using Nvidia's GPUs remotely. The service is currently in beta, but a million-plus players have signed up for the wait list. The subscription-based service could be a cash cow for Nvidia. But cloud gaming remains a work in progress. Widespread availability of 5G is required before cloud gaming reaches critical mass.Nvidia's other businesses face headwinds as well. Last quarter, the company projected continued weak sales for the data center segment. The analyst community also believes that the data center business has yet to turnaround. But if the company can beat expectations and provide an improved forecast, investors could see a boost in the Nvidia stock price.Much of this risk could already be factored into the Nvidia stock price. But this does not necessarily mean NVDA is undervalued. With this in mind, let's take a look at Nvidia stock's current valuation. Nvidia Stock is Not CheapNvidia stock continues to trade at a discount to AMD shares. NVDA currently trades at a forward price/earnings (forward P/E) ratio of 38, compared to AMD's 69.5 forward P/E. In terms of enterprise value/EBITDA (EV/EBITDA), NVDA trades at an EV/EBITDA ratio of 28.4, compared to AMD's EV/EBITDA ratio of 69.7.While NVDA trades at a lower valuation than AMD, I continue to believe that Nvidia stock is not cheap. NVDA trades at premium to broad line chip makers such as Intel (NASDAQ:INTC), which currently trades at a forward P/E of 11.5 and has an EV/EBITDA ratio of 7. Another broad line chip maker, Broadcom (NASDAQ:AVGO), trades at a forward P/E of 50.3, but at a lower EV/EBITDA ratio (14.2) than Nvidia. With the company's growth troubles, it is tough to justify the stock's current premium to the broad line chip names. NVDA may be a strong opportunity down the road, but not at the current price. * Stocks Under $7 to Invest in Now Bernstein analyst Stacy Rasgon agrees. Rasgon recently gave the stock a "market perform" rating, believing the shares' current valuation minimized potential upside. As he wrote in his client note, "We remain somewhat cautious into the print nonetheless, and believe better entry points may exist at later dates."Rasgon's price target is $150 a share. I believe NVDA stock could go materially lower. If NVDA continues to disappoint, shares could trade closer to the valuations of the broad line chip makers. Bottom Line on NVDA StockInvestors have beaten down NVDA stock but they're not yet at bargain levels. While the company's valuation is below arch rival AMD, Nvidia stock continues to trade at a fairly high valuation. More bad news could hit the price and present a stronger buying opportunity. But it could also be a warning sign to avoid the stock further. Take your time with NVDA. Wait until a better entry point, then make your move.As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 15 Growth Stocks to Buy for the Long Haul * 5 More Cloud Stocks With Plenty of Potential * 5 Clean Energy ETFs to Buy for 2019 The post Should You Buy Nvidia Stock Ahead of Today's Earnings? Not So Fast! appeared first on InvestorPlace.
AMD’s exposure to China makes it vulnerable to escalating US-China trade tensions. The yuan's devaluation could cause massive foreign exchange losses.
Advanced Micro Devices Inc (NASDAQ:AMD) has been one of the best performing semiconductor stocks over the past year; it is up over 60% year-to-date. As new frontiers in technology, such as the Internet of Things (IoT), artificial intelligence (AI), autonomous driving, and 5G are being developed, I am bullish on the future of AMD stock.However, there are several short-term headwinds that may need to be discounted against the AMD stock price. These bearish themes include uncertainty as to when the U.S.-China trade wars will be resolved, the cyclical nature of the chip industry, slowing demand in gaming consoles, and AMD's rich valuation metrics. Therefore, in the coming weeks, the positive momentum in Advanced Micro Devices stock may stall. Let us see why.InvestorPlace - Stock Market News, Stock Advice & Trading Tips AMD Stock Cannot Be Immune to China-Related RisksThe U.S.-China trade war is now in its second year. Wall Street is nervous that the prolonged tariff wars will continue to affect chip companies' earnings for the rest of the year. China is the leading consumer of semiconductors with more than 50% of the global demand coming from the country.And U.S. chip companies, including Advanced Micro Devices, lead the world with a combined global market share of nearly 50%. Furthermore, many technology companies, including AMD, either have manufacturing plants or joint ventures in China. Additionally, they typically use Chinese companies in their supply chains. Therefore, investors fear that American chip makers will be among the largest losers of the current trade war.During the recent second-quarter earnings release of July 30, AMD management highlighted China as a risk. At present, over 30% of revenues come from China.Moreover, the chip industry is a highly cyclical one. In case of an economic slowdown either in the U.S. or globally, AMD stock as well as other industry players would be adversely affected.Wall Street has recently been debating whether chip stocks have reached their 2019 highs in the eyes of investors. For long-term investors, such gyrations in the sector are nothing new. However, it may mean more volatility for Advanced Micro Devices stock in the near-term. Advanced Micro Devices Stock Has Several Company Specific RisksAMD has a reputation for reporting mixed earnings. That was once again the case when the semiconductor firm reported on July 30. AMD stock beat expected estimates. However, revenue was down 13% year-over-year. The company said revenue was lower in both its computing and graphics and enterprise, embedded and semi-custom segments. As a result, management lowered Q3 guidance. And the markets penalized Advanced Micro Devices stock the next day.Constantly lacking the "wow" factor in most of their earnings makes the AMD stock price vulnerable to rapid declines. Naturally, this has unnerved many long-term investors.Furthermore, analysts are debating whether Advanced Micro Devices stock is becoming overvalued. For example, its forward price-to-earnings-growth (PEG) ratio is about 1.6-times forward earnings. Similarly, AMD's price-sales (P/S) ratio of about 6 times is also quite high. To put the metric into perspective, the S&P 500 index's average P/S ratio is 2.2x.It would be also important to mention the various rumors that CEO Lisa Su may leave AMD. Since late 2014, under her leadership, revenue has increased and the company has been improving its balance sheet. Its debt has also reduced considerably. Over the next five years, analysts expect AMD to grow earnings by about 30% annually. Therefore, if Dr. Su were to leave the position, AMD shareholders may decide to stay on the sidelines until there is more clarity regarding her successor.So far in 2019, Advanced Micro Devices has offered new products. These have increased investor expectations for coming quarters. Thus, it would not be wrong to assume that most of the good news has already been factored into the AMD stock price. However, if the group cannot deliver robust earnings in the coming quarters, then investors would not hesitate to punish shares. Short-Term Technical Analysis of AMD StockDue to the impressive run-up in Advanced Micro Devices stock in 2019, several technical indicators have become quite overbought. Therefore, market participants should exercise caution.If you are an investor who follows technical charts, AMD stock has strong resistance around $35. This is a level which it has not been able to pass four times in the past two months. In other words, if or when AMD stock can go and stay over $35, long-term investors should expect another big move up in the share price.However, if it cannot go and stay over $35 soon, some profit-taking will likely occur again. In such a case, AMD stock is likely to trade within a range of about $28 to $34.The short-term technical charts of Advanced Micro Devices stock, especially following the recent earnings report, indicate a higher risk that shares can fall below $30.Because Advanced Micro Devices stock is a momentum play, investors should expect sizeable daily swings. Technically, AMD is known to make a series of rallies and consolidations. We can expect this trend to continue in August and September, too. The Bottom LineI am upbeat on the long-term outlook of AMD stock. In June, in addition to the broader market rally, shares received an analyst upgrade that boosted their price.However, Advanced Micro Devices stock is not immune to the daily wide swings in the broader markets. Moreover, profit taking may happen soon. I believe that headwinds in gaming consoles and China can adversely affect next quarter's numbers.If you already own Advanced Micro Devices stock, you might want to stay the course and hold onto your position. That said, if you are worried about short-term profit taking, then within the parameters of your portfolio allocation and risk/return profile, you may consider placing a stop loss at about 3% to 5% below the current price point. This strategy protects the profits you have already made from AMD stock.If you are an experienced investor in the options market, you may also consider using a Sept. 20 expiry at-the-money (ATM) covered call strategy. In that case, you may, for example, buy 100 shares of AMD at a limit price of $32 and sell an AMD Sept. 20 $32 call option, which currently trades at $2.10.The $32 option offers some downside protection in case of volatility and a decline of the AMD stock price. It would also enable investors to participate in a potential up move. This call option would stop trading on Sept. 20 and expire on Sept. 21.I find AMD stock to be a buy candidate, especially as its price dips below $30. In a few years, I'd expect the shares to reach $40.As of this writing, the author holds AMD and INTC covered calls (Aug. 16 expiry). More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 15 Growth Stocks to Buy for the Long Haul * 5 More Cloud Stocks With Plenty of Potential * 5 Clean Energy ETFs to Buy for 2019 The post Investors Should Expect Short-Term Volatility in AMD Stock appeared first on InvestorPlace.