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Nvidia’s Fiscal Q3 Earnings Preview: The Pressure Is On
Nvidia has surged this year with 241% gains YTD, which has more than doubled the returns of the FAANGs. This is no small feat considering it’s widely understood Big Tech is holding up the broader market. Valuations are stretched and leadership is only narrowing; to say there’s pressure going into Nvidia’s report this evening is an understatement.
Apple’s Services Growth Flywheel Continues To Strengthen
Apple’s Services segment was one of the brightest spots in a relatively in-line earnings report at the beginning of November, topping an $85 billion run rate as growth jumped back to the high double-digits after a string of single-digit growth.
Tesla Sells 33% Of Vehicles Below Average Cost, BYD Pulls Ahead
BYD more than doubled Tesla’s China sales in October as Tesla’s sales slipped on a month-over-month basis, while NEV startups showed strong sales numbers across the board. China’s new energy vehicle (NEV) industry continues to exhibit solid momentum, with September seeing NEV sales rise about +22% YoY and October estimated to see around +34% YoY growth.
Solar Stocks Still Searching For A Bottom
Solar is arguably one of the market’s most sold-off industries at the moment, with the Invesco Solar ETF falling more than 42% YTD as the industry struggles to find growth in a high-rate environment. With implied Fed funds futures suggesting interest rates will remain above 5% through Q2 2024 before slowly dropping to the 3.75% range by year-end 2025, the industry is still facing a high-rate environment with more possible adverse demand effects for multiple quarters ahead.
Five Stocks (Not Seven) Can Lead to New Highs
The majority of other sectors are confirming a continuation of the 2022 bear market, meanwhile, a handful of big tech names, with outsized weighting in the major indexes, suggest that they want to go higher. Though this pattern of narrow leadership where the market is held up by 7 stocks is unsustainable and a warning of an unhealthy market, it can continue, and likely will, at least into late 2023/early 2024.
Big Tech Stocks: Q3 Earnings Preview
Earnings season has officially kicked off, with Big Tech headlining a busy week next week: Microsoft and Google report on Tuesday, followed by Meta on Wednesday, and Amazon on Thursday. Big Tech stocks have seen their dominance over the broader indexes soar this year, with the Magnificent 7 reaching nearly 30% of the S&P 500’s weighting, higher now than at its peak in 2022 and up from 20.0% at the beginning of this year.
AI Could Be Apple’s Next Chapter
After Nvidia added $750 billion in value this year on the backs of surging AI chip demand, investors are quickly searching for the next trillion-dollar AI winner. AI is the best investment opportunity of our lifetimes, and although Apple (AAPL) has been relatively overlooked as an AI play, the tech giant could quickly become a force to be reckoned with in the AI space.
AI is the Best Investment Opportunity of our Lifetime: Video Interview
Real Vision invited Beth Kindig back for a candid interview with Raoul Pal for a one-hour discussion on how to position for AI. As discussed in the interview, the reason that AI will be the best investment opportunity of our lifetime is because of the impact it will have on GDP. In the 1-hour interview, Beth points out that the potential of AI to revolutionize nearly every sector, boost productivity, reduce costs, and significantly influence GDP is unparalleled. To be exact, AI is estimated to add up to $15.7 trillion to the global economy by 2030, and drive a market 5x the size of tech’s current global spend. Beth tweeted this in 2019.
