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Nvidia Shines in Second Quarter of Fiscal 2026

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Image Source: Nvidia By Brian Nelson, CFA On August 27, market darling Nvidia (NVDA) reported better than expected fiscal second quarter results with both revenue and non-GAAP earnings per share coming in ahead of the consensus forecast. Total revenue increased 56% from the year-ago period, to $46.74 billion (consensus was at $46.13 billion), with Data Center revenue of $41.1 billion advancing by a similar clip, the latter coming in slightly below the consensus estimate of $41.29 billion. In the quarter, GAAP and non-GAAP gross margins were 72.4% and 72.7%, respectively. GAAP and non-GAAP earnings per diluted share were $1.08 and $1.05, respectively. Consensus was at $1.01. Blackwell Data Center revenue increased 17% on a sequential basis, and there were no … Read more

Magnificent 7 Earnings Reports Not Bad Thus Far

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By Brian Nelson, CFA   Shortly after Trump’s Liberation Day, where the President unveiled lofty tariffs on numerous countries, we released our wait-and-see outlook for the equity markets, which thus far has proven to be the right move, with the markets largely recovering from the depths reached in April. The S&P 500 (SPY), for example, is down just 3.3% year-to-date, excluding dividends.   A lot has happened since Liberation Day, including easing of tariffs to a 10% baseline for most, if not all, countries, with the key exception of China, where tariffs remain extremely elevated and prohibitive. Many countries are now reportedly negotiating trade agreements with the White House, and we expect China to be added to that list soon, even if … Read more

What to Do During This Market Selloff

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By Brian Nelson, CFA In short, nothing. The U.S. stock market (SPY) was chugging along nicely until what was interpreted as a very favorable Consumer Price Index (CPI) print on July 11 that sent a rotation out of large cap growth and big cap tech into the beaten down areas of smaller cap stocks, prompting a broader market sell-off. The reasoning goes that, with inflation largely under control, smaller companies will benefit more from future rate cuts via reduced interest expense relative to larger companies. Though this is true, to varying degrees, the magnitude of the rotation was somewhat surprising, as rate cuts should benefit large cap growth (SCHG) and big cap tech (XLK), too, but we’ve seen this rotation … Read more

We Remain Bullish; Is This 1995 – The Beginning of a Huge Stock Market Run?

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Image: Large cap growth stocks have trounced the performance of the S&P 500, REITs, and bonds since the beginning of 2023. We expect continued outperformance in this area of the market. By Brian Nelson, CFA We’re now roughly four years past the depths of the COVID-19 meltdown, where equities collapsed in February and March of 2020. As the markets began to recover through 2020, our long-term conviction in equities only grew stronger. We think the biggest risk for long-term investors remains staying out of the market on the basis of what could be considered stretched valuation multiples. As we outlined heavily in the book Value Trap, valuation multiples hardly tell the complete story about a company and often omit key … Read more

Chinese Equities Still Uninvestable

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Image: Large cap Chinese equities are back to levels first reached in 2005, almost two decades ago. By Brian Nelson, CFA Chinese equities (MCHI) used to be praised for their diversification benefits in a global portfolio, but over the past 20 years, they haven’t done much. The iShares China Large-Cap ETF (FXI) is now back to levels first reached in 2005, and we see little reason why Chinese equities will catch a bid given the strength in other alternatives, namely U.S. indices, particularly the Nasdaq (QQQ), and in risk-free assets, including certificates of deposit at local and online banks. On January 22, Reuters reported that China’s major state-owned banks are working to support the yuan, while selling U.S. dollars, so … Read more

In the News: Apple, Nvidia, ANSYS

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By Brian Nelson, CFA The first week of trading in the new year wasn’t very welcome, but we think it is far too early to draw any conclusions about how the rest of the year will be. The Dow Jones Industrial Average (DIA), S&P 500 (SPY), and NASDAQ (QQQ) faced selling pressure in the first week due in part to investors waiting until the new year to book the huge gains garnered during 2023. The market continues to digest critical employment data, as it watches movements in the 10-year Treasury closely, a key benchmark rate for asset pricing that now stands just north of 4%. Many bulls are saying 2024 may be a difficult year after the worst start in … Read more

12 Reasons to Stay Aggressive in 2024

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By Brian Nelson, CFA 1. The Fed has signaled that rate cuts could start with inflation at a 2 handle (2 point something) and not at exactly 2.0%. That means that the Fed may become anticipatory to prevent overshooting to the downside with inflation. We see this as positive for long-duration equities, particularly those whose free cash flow generation is robust in the out-years, inclusive of big cap tech and the stylistic area of large cap growth. 2. Unemployment is at structural lows of 3.7%. Employers are working hard to keep talent on board, and with each paycheck, employees are pumping more and more money into the stock market via retirement accounts. This tailwind remains a stiff one and will … Read more

Can Things Really Stay This Good?

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Hi everyone:   It’s Brian. Can things really stay this good? It’s a question that I keep asking myself. For starters, the investment landscape has changed quite a bit over the past decade. Years ago, interest rates were near-zero, and an intense focus on dividends may have made a lot of sense. Interest rates are now much higher, and that means risk-free assets offer yields that are a multiple of that of the yield of the S&P 500. The markets in this regard are starting to make a lot of sense as Dividend Aristocrats have suffered a difficult year so far in 2023.   I think many of these names will likely remain depressed until risk-free rates fall below that … Read more

Apple: $200 Per Share at the High End of the Fair Value Estimate Range

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—– NOW READ — ALERT: Big Yield Additions to Dividend Growth Newsletter Portfolio and High Yield Dividend Newsletter Portfolio NOW READ — ALERT: Going to “Fully Invested” in the Best Ideas Newsletter Portfolio  NOW READ — Expect Huge Equity Returns This Decade, Much More Volatility However NOW READ — There Are No Free ‘Income’ Lunches ———- It’s Here!  The Second Edition of Value Trap! Order today!   —– Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, and RSP. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.  Valuentum members … Read more

Meta Platforms Surges Back to Fair Value Estimate

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Image: Meta Platforms’ shares continue to recover from its massive fallout in 2022. We’re sticking with our $225 fair value estimate following the company’s first-quarter 2023 earnings report. By Brian Nelson, CFA Meta Platforms (META), formerly Facebook, has surged back to our discounted cash-flow-derived fair value estimate. Year-to-date in 2023, the social media behemoth’s shares have almost doubled, and while we are pleased with the company’s share-price comeback, we don’t envision making any material changes to our $225 per-share fair value estimate following the company’s first-quarter 2023 report, which we thought was just okay. Meta Platforms’ shares remain significantly below the $380+ highs that were reached in August 2021. We’re happy to see the pop in Meta’s stock during the … Read more