SCHG

Nvidia Reports Better Than Expected First Quarter Results

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Image: Nvidia’s shares are flirting with all-time highs. By Brian Nelson, CFA On May 28, Nvidia (NVDA) reported better than expected first-quarter fiscal 2026 results with revenue and non-GAAP earnings per share coming in higher than the consensus forecasts. Revenue increased 69% from the year-ago period thanks to strength in Data Center revenue, which was up 73% from a year ago. Gaming revenue was a record $3.8 billion, up 42% from a year ago. Professional Visualization revenue was up 19% from a year ago, while first quarter Automotive revenue was up 72% from last year. First-quarter non-GAAP gross margin was 71.3%, while first quarter non-GAAP diluted earnings per share was $0.96. Management had the following to say about the results: … 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

How Does 37% Sound?

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Image: The Schwab U.S. Large Cap Growth ETF (SCHG) is up more than 37% so far in 2024. By Brian Nelson, CFA How does 37% sound? That was the price-only performance of the Schwab U.S. Large Cap Growth ETF (SCHG) thus far in 2024. Over the preceding 5-year period, the SCHG is up over 140%. For years, I have pounded the table on the theory that there are not value or growth stocks, but rather undervalued, fairly valued, or overvalued stocks. It’s why many growth stocks can be undervalued. It’s the Theory of Universal Valuation found in Value Trap that ties myriad areas of finance to the well-known discounted cash-flow [DCF] model. Growth is a component of value. Hook, line, … 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

Alphabet or Microsoft in Artificial Intelligence with Respect to Search? We Like Both

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Image Source: SEO By Brian Nelson, CFA The race to capture the next-generation opportunity in web search technology is fast-developing. OpenAI took the world by storm when it released ChatGPT in December 2022, sparking the proliferation of ChatGPT rivals, the list of a dozen of which can be found here. In this article, we provide a timeline of our take as it relates to large language models with respect to web search technology, and why we view playing both Alphabet (GOOG) (GOOGL) and Microsoft (MSFT) as it relates to search and AI technology may be the best way to approach new developments in this area, which are still in their very early stages. It’s very likely that, if Google search … 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

Palantir’s Fourth-Quarter Results Showcase Strong Trends in Artificial Intelligence

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Image: Palantir’s revenue continues to march higher, and the company’s performance continues to showcase the growing strength in artificial intelligence. Source: Palantir By Brian Nelson, CFA Palantir Technologies (PLTR) has three core software platforms called Gotham, Foundry, and Apollo that “provide the critical infrastructure needed to integrate (its) customers’ data and operations and run their software in virtually any environment (Form 10-K).” On February 5, the firm reported solid fourth-quarter results that showed revenue growing 20% on a year-over-year basis and GAAP net income coming in at $93 million, representing the fifth consecutive quarter that the firm has driven positive GAAP profits. We liked Palantir’s quarterly results, but we wanted to bring to members’ attention the commentary surrounding artificial intelligence [AI]: … 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

ICYMI — Video: Our Top Stocks for 2024

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Video: Valuentum’s President of Investment Research Brian Nelson walks through the success of Valuentum’s newsletter suite, the state of the economy and markets, and offers his favorite idea for each sector. Tune into this must-watch video. ———- 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, RSP, SCHG, QQQ, and VOO. 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 have access to our 16-page stock … 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