Lead Tech Analyst Beth Kindig had the pleasure of joining Darius Dale, CEO and co-founder of 42 Macro.  Darius has a strong background in macroeconomics and specializes in a quantitative economic outlook and investment strategy.

In the interview, the two of them discuss the I/O Fund’s idea generation process, outlook for where we are in the tech cycle, why the I/O Fund is not buying Nvidia right now, and other active risk management strategies that help our firm to outperform the market.

You can watch the full 1-hour video interview here.

Current Tech Cycle

In the clip below, Beth explains why the I/O Fund is not buyers of stocks at the moment. She stated: “Over the next three to six months, we are not buyers […]  of the stocks are reaching our price targets and [we are] waiting for the next sell-off to buy quality names at lower price levels. So, in terms of the tech cycle this is not a time that we are buying stocks.”

Every Thursday at 4:30 pm Eastern, the I/O Fund team holds a webinar for premium members to discuss how to navigate the broad market, as well as various stock entries and exits. We offer trade alerts plus an automated hedging signal. The I/O Fund team is one of the only audited portfolios available to individual investors. Learn more here.

Rolling the Dice on Getting Nvidia Lower:

In the interview, Beth Kindig stated: “We ultimately think you can get Nvidia lower than where it is trading now. We are likely to take gains between $120 and $150 based on technical levels. The valuation has finally caught up to the fundamentals, and we have about six to nine months before Blackwell arrives.”

Earlier this year, Beth Kindig also spoke on Yahoo Finance that Blackwell Shipments are ‘not a concern’ to clear the noise that investors had about the delay in Blackwell chips. Also, we could expect fireworks in the first half of 2025 due to Blackwell. She also boldly wrote The Information was exaggerating the Blackwell delay, and recently stated Nvidia would reach a $10 trillion market cap following her prescient call years ago that Nvidia would surpass Apple’s valuation. 

Despite Beth’s bullish stance, she stresses the importance of using technical analysis, as tech investing is sentiment-driven and has proven to have stellar returns in the past. I/O Fund has a history of buying Nvidia at low prices. The first entry was $3.15 in December 2018 and provided 9 buy alerts below $20 for Nvidia. The I/O Fund is preparing to repeat the process of buying low for the benefit of their Premium Members, who receive real-time trade alerts for every entry.

Nvidia is NOT Cisco: Why AI is Nothing Like Dot-Com

In this interview, Beth Kindig explains the key difference between the dot-com bubble period and the current AI opportunity. The internet is open source and democratized. Any person can easily put up a website and nobody owns the internet. On the other hand, AI is proprietary and the companies own their own models. The number of companies that can invest in training LLMs are very few, at this time. This fundamental difference suggests that a direct parallel between the dot-com bubble and the current AI boom is not applicable.

The company also highlighted earlier this year that the NVIDIA Omniverse Enterprise software subscription is $4,500 per GPU per year, which further highlights the point that Nvidia cannot be compared to Cisco.

Colette Kress, CFO of Nvidia, highlighted in the Q1 earnings call the return on investment for Cloud Service Providers by renting GPUs. “For every $1 spent on NVIDIA AI infrastructure, cloud providers have an opportunity to earn $5 in GPU instant hosting revenue over four years. NVIDIA's rich software stack and ecosystem and tight integration with cloud providers makes it easy for end customers up and running on NVIDIA GPU instances in the public cloud.” This sheds light on why capex budgets continue to grow.

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Beth Kindig has also discussed on X.com that even though shares rose more than 1,000% since 2022 lows, Nvidia’s forward P/E did not reach the heights of Cisco in 2022, suggesting that it’s not accurate to drawing parallels between the two:

Risk Management

Beth also says that diversification is not a good strategy for tech investors. Instead, the I/O Fund allocates 20% of our portfolio to a promising stock. She also points out that broad market performance is equally important for tech stocks to perform well and, finally, to adhere to stop-loss orders. The I/O Fund has cut positions on the stocks that we are long-term bullish in an attempt to buy at lower levels. She provides the example of how our firm has actively managed Microsoft in the interview.

While Wall Street is worried about how much AI is costing, the I/O Fund is busy calculating how big the AI opportunity can get in the next few years and how investors can participate. Learn more about the I/O Fund’s holdings, including when the firm plans to buy Nvidia next, plus consistent deep dive research on AI stocks, crypto and more here.

Disclaimer: The I/O Fund conducts research and draws conclusions for the company’s portfolio. We then share that information with our readers and offer real-time trade notifications. This is not a guarantee of a stock’s performance and it is not financial advice. Please consult your personal financial advisor before buying any stock in the companies mentioned in this analysis. Beth Kindig and the I/O Fund own shares in NVDA at the time of the writing.

Recommended Reading:

• Nvidia Stock: Blackwell Suppliers Shrug Off Delay Ahead Of Q2 Earnings
• Nvidia Stock Is Selling Off: It’s Not Because Of Blackwell
• AI PCs Have Arrived: Shipments Rising, Competition Heating Up
• 4 Things Investors Must Know About AI