Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - Nvidia Just Flipped the Market | Everything You Need to Know + Stock Market News 21 November 2024

Transcript

Felix Prehn - Nvidia Just Flipped the Market | Everything You Need to Know + Stock Market News 21 November 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: The mighty Nvidia just reported earnings.
• 0:02
  Speaker 1: In the next few minutes, you'll understand exactly what that means for Nvidia, for the semiconductor space and just for stocks generally.
• 0:09
  Speaker 1: I'll also show you a couple of stocks that are flying right now.
• 0:13
  Speaker 1: That might be something worth looking at, and everything else to make you the best informed investor out there.
• 0:18
  Speaker 1: That's always my intention and my goal.
• 0:20
  Speaker 1: So let me share my screen with you and tell you to watch your socks.
• 0:24
  Speaker 1: Yes, it is a little chilly here, hence the scarf.
• 0:26
  Speaker 1: Why watch the socks?
• 0:29
  Speaker 1: So you see that meaningful blue line I've drawn in here and we'll get into NVIDIA in just a second.
• 0:34
  Speaker 1: But we need to understand sort of the framework of this.
• 0:37
  Speaker 1: That is obviously just a trend line, but there is another line in here that is maybe a little harder to see and I'll make it into a.
• 0:46
  Speaker 1: Well, what shall I actually make it?
• 0:48
  Speaker 1: What sort of weird orangey thing here, that line there, and what is that?
• 0:53
  Speaker 1: That line there?
• 0:54
  Speaker 1: What is that?
• 0:55
  Speaker 1: Any ideas?
• 0:55
  Speaker 1: It is the 200 day moving average, and mantra on wall street has it that nothing good ever happens below the 200-day moving average.
• 1:04
  Speaker 1: We are distinctly below that 200-day moving average and if we break through the blue trend line then bad things might happen, very, very bad things might happen.
• 1:18
  Speaker 1: We don't want that to happen, but I just want to put that into perspective that we are at the very sort of cliff of goodness in the chip sector.
• 1:26
  Speaker 1: It would basically imply that all chips are going to sell off very heavily.
• 1:29
  Speaker 1: So it is decision time for tech stocks, because the rally is largely pinned on NVIDIA and the whole AI thing.
• 1:38
  Speaker 1: And again, watch this blue line I've drawn in here and again it connects the lows here of the last couple of months and we are very, very, very close to that for the NASDAQ.
• 1:51
  Speaker 1: So we really want to hold on to that 500 point mark on the QQQ.
• 1:57
  Speaker 1: If we don't, there will be some support at 490.
• 2:02
  Speaker 1: Market makers will start buying at 490.
• 2:04
  Speaker 1: And this data, by the way, comes all from Trade Vision, which is there it is.
• 2:09
  Speaker 1: You can get yourself a week's trial to that and see if you get the value out of it that I think you will, and really watch those lines Super, super important.
• 2:19
  Speaker 1: But let's look at NVIDIA the good, the bad, the ugly what is it?
• 2:24
  Speaker 1: Well, if you look overall, just take a step back and you'd never heard of this company.
• 2:29
  Speaker 1: Didn't know what they did.
• 2:30
  Speaker 1: What would you say?
• 2:31
  Speaker 1: Well, you would say hang on a moment.
• 2:34
  Speaker 1: They bring in 35 billion revenue and they get to keep almost 20 billion 19.3 billion of that as real profit.
• 2:42
  Speaker 1: That sounds like some sort of extraordinary software company.
• 2:45
  Speaker 1: And then you are told that it is actually a hardware business I know they outsourced the manufacturing, but you could say the same for Apple and that they have this crazy, crazy margin right, so that's very good.
• 2:59
  Speaker 1: You would then also see okay, they spent a little bit less on R&D, which is good.
• 3:03
  Speaker 1: Margins basically flat.
• 3:07
  Speaker 1: That's pretty good at margins like that.
• 3:09
  Speaker 1: And revenue went up 17% quarter on quarter on data center revenue, which is really what matters.
• 3:15
  Speaker 1: So what's the fly in the ointment?
• 3:18
  Speaker 1: Is there a fly in the ointment?
• 3:20
  Speaker 1: Well, let me show you this.
• 3:23
  Speaker 1: First, data center revenue is now $30 billion.
• 3:27
  Speaker 1: A year ago it was $14 billion, so it has more than two Xs, which is pretty extraordinary, and that's what's driving the whole thing here.
• 3:37
  Speaker 1: So a year ago they had $18 billion in revenue for the quarter.
• 3:45
  Speaker 1: Did you see how much profit they made in this quarter?
• 3:49
  Speaker 1: 19 billion.
• 3:51
  Speaker 1: They make more profit now than the entire company's revenue was a year ago.
• 3:56
  Speaker 1: I would call that pretty extraordinary growth, and you'd think the stock should be firing on all cylinders, but it isn't, is it?
• 4:04
  Speaker 1: So what's the problem?
• 4:05
  Speaker 1: Well, let me show you.
• 4:11
  Speaker 1: Nvidia said this they expect fourth quarter revenue to be between $36.7 and $38.2 billion.
• 4:19
  Speaker 1: That's growth.
• 4:20
  Speaker 1: What's the problem with it?
• 4:21
  Speaker 1: Well, the market was hoping for a little bit more.
• 4:24
  Speaker 1: They were hoping for slightly higher guidance.
• 4:27
  Speaker 1: So we're between 36 and 38 billion, right?
• 4:29
  Speaker 1: So we're kind of in this sort of zone here.
• 4:33
  Speaker 1: This is from Goldman Sachs.
• 4:35
  Speaker 1: You know the bankers with that lovely fluffy heart who donate largely to critter charities and have lots of cuddly animals running around their trading floors, those kind of people and they're saying well, the stock should probably go down 10%.
• 4:51
  Speaker 1: That's what they're saying.
• 4:52
  Speaker 1: Now it hasn't, which shows that maybe the market's grown up a little bit or just realized that Goldman Sachs is often wrong, or maybe the reputation as you know, fluffy Cutlass has preceded them.
• 5:06
  Speaker 1: But yeah, that's the risk here, right, that the market wakes up and really understands.
• 5:10
  Speaker 1: Okay, guidance is lower.
• 5:11
  Speaker 1: Lower guidance could mean slowing demand, which is not really something we thought about, right?
• 5:19
  Speaker 1: But then you listen to Jensen Huang, the chest signer, and what does he say?
• 5:27
  Speaker 1: He basically says we have supply constraints still right, and those supply constraints are going to be solved, probably in the next two quarters.
• 5:37
  Speaker 1: So as they get solved, we should get a massive acceleration in growth, probably two quarters away, which is kind of what I've been saying.
• 5:47
  Speaker 1: So I'm not pretending that I know more than him, it's just I've been listening to him for some time.
• 5:51
  Speaker 1: So it really is a question of does the short-term, does short-termism win?
• 5:58
  Speaker 1: If short-termism wins, today, we should be going down very significantly.
• 6:03
  Speaker 1: If the more medium-term guys are a little bit more level-headed, then, you know, maybe we end the day at sort of plus minus zero, which is kind of the logical thing that everything is just fine, nothing to see here.
• 6:16
  Speaker 1: Folks, move along.
• 6:18
  Speaker 1: Now I'm going to show you a couple of stocks that are breaking out, if you want to understand and pick those yourself.
• 6:24
  Speaker 1: Almost every single day there is a stock that breaks out that could potentially make you like 50 percent, 100 percent or something and I'm not saying it will necessarily, but there is a good chance of it and if you understand those breakout rules, then you're in a much better position than everybody else out there.
• 6:39
  Speaker 1: Where do those breakout rules come from?
• 6:41
  Speaker 1: Wall Street.
• 6:41
  Speaker 1: Wall Street traders have been using them for decades and I'll teach them to you completely for free.
• 6:46
  Speaker 1: Watch the masterclass at felixfrenzorg slash.
• 6:48
  Speaker 1: Get free and you'll learn.
• 6:50
  Speaker 1: You really will.
• 6:52
  Speaker 1: So some of our stocks keep delivering.
• 6:55
  Speaker 1: Sofi I got this in my inbox this morning which was rather nice from Trade Vision, which, of course, is us buy signal on SoFi yet again, and I was like woohoo, that's pretty good, because we have a pretty sweet SoFi position open.
• 7:07
  Speaker 1: Let me show it to you what the stock's up to here.
• 7:11
  Speaker 1: Show it to you what the stock's up to here.
• 7:19
  Speaker 1: And what do you see?
• 7:20
  Speaker 1: Well, you've kind of been on a tear since $10.
• 7:23
  Speaker 1: Excuse, excuse, the slightly scratchy throat and you're now trading ever so slightly under $15.
• 7:33
  Speaker 1: Why does that matter?
• 7:38
  Speaker 1: Well, let me show you yeah, the last buy signal kicked in there.
• 7:41
  Speaker 1: Let me just take that off.
• 7:42
  Speaker 1: The resistance is now at $15 and we almost got there yesterday $15, $14.86 or something like that.
• 7:49
  Speaker 1: So what we have here is a classic kind of a pattern where you get a breakout right, you rally up, a little bit of exhaustion, you get another breakout, you rally up again, and then you tend to get these sort of flags down and then that gives you a second chance to buy and then, in an ideal world scenario, you go higher, and we just did Massively higher, high, higher, low.
• 8:15
  Speaker 1: So very, very, very bullish here for SoFi.
• 8:17
  Speaker 1: I'm expecting this one to make us a lot of money.
• 8:20
  Speaker 1: I'm not saying you should buy it, but do your own research.
• 8:24
  Speaker 1: So that's SoFi, which is pretty good.
• 8:26
  Speaker 1: What about Palantir?
• 8:27
  Speaker 1: Look at this just now.
• 8:28
  Speaker 1: Insane stuff.
• 8:30
  Speaker 1: And we'll look at the Nvidia chart in a second as well, because that's important.
• 8:36
  Speaker 1: But Army Intense sole-sourced $619 million contract, and who is getting it?
• 8:42
  Speaker 1: The government has approved other than Ford, and Open Competition is seeking proposal only from Palantir, sole supplier.
• 8:51
  Speaker 1: No authorized resellers hold proprietary rights.
• 8:53
  Speaker 1: Nobody else is even getting a look in on this contract and that means Palantir is just the only company out there that is actually able to deliver this.
• 9:03
  Speaker 1: So monopoly status, right, proper, proper monopoly status, which is just how you make all the money.
• 9:11
  Speaker 1: So 20 years of building tech seems to be paying off for Palantir and the stock is trading at $61 almost, which is very, very good.
• 9:21
  Speaker 1: And you might be thinking well, why isn't it flying up?
• 9:23
  Speaker 1: Well, it was trading at $16 at the beginning of the year, so it's an extraordinary rally already.
• 9:29
  Speaker 1: And, yes, expectations are going to be sky high, and we better hope that Elon shifts quite a few contracts over to Palantir in January, because otherwise I think there might be a bit of a dry January for Palantir shareholders.
• 9:46
  Speaker 1: So would I say, definitely, buy this hand over fist.
• 9:48
  Speaker 1: I'd be a little bit more cautious just because the rally is gone.
• 9:51
  Speaker 1: Valuations are rich, I would say, and I wouldn't necessarily sell it, but I'd set some stop losses and I'd probably look for another opportunity till we get another opportunity to load up on Palantir.
• 10:04
  Speaker 1: That's just my view.
• 10:05
  Speaker 1: But yeah, insane, how well that's doing.
• 10:07
  Speaker 1: I also wanted to show you NVIDIA here.
• 10:10
  Speaker 1: So this was the earnings as they came out.
• 10:16
  Speaker 1: Let me grab my little pen here.
• 10:17
  Speaker 1: Am I allowed?
• 10:17
  Speaker 1: Am I allowed?
• 10:17
  Speaker 1: Apparently not?
• 10:18
  Speaker 1: This was the earnings as they came out.
• 10:18
  Speaker 1: Let me grab my little pen here.
• 10:19
  Speaker 1: Am I allowed?
• 10:19
  Speaker 1: Am I allowed?
• 10:21
  Speaker 1: Apparently not?
• 10:24
  Speaker 1: Ah, there we go.
• 10:25
  Speaker 1: So earnings came in where, here, right, and the reaction was a monstrous drop, very significant drop, about 5% down or so.
• 10:36
  Speaker 1: And then immediately, almost immediately, we rallied back up and really really big volume down here, by the way, very, very big volume for after hours trading.
• 10:45
  Speaker 1: And then we sort of fizzled out a little bit and as I'm recording this.
• 10:47
  Speaker 1: We're basically down 2%, which is sort of neither here nor there.
• 10:50
  Speaker 1: So in an ideal scenario, we just hang around the sort of minus 2%.
• 10:58
  Speaker 1: People get over it and life's all good, and I think there are a lot of reasons to be bullish on it.
• 11:02
  Speaker 1: I will put together a proper review of the earnings, but I want to do it justice and maybe chew on it for a few days and really go through everything and all the reactions.
• 11:11
  Speaker 1: But to me, nothing has changed Really literally nothing has changed here.
• 11:14
  Speaker 1: I think they've done a very good job.
• 11:15
  Speaker 1: I think the story is intact.
• 11:17
  Speaker 1: Whether or not guidance is maybe a little sandbagged, I think that's entirely possible because guidance expectations have been so high.
• 11:25
  Speaker 1: Yeah, we might not break through the 150 here anytime soon, but we can live with NVIDIA in the 140s or even 130s, really not an issue.
• 11:34
  Speaker 1: For me, the only danger is if we do drop, as I said at the very beginning, that SOX chart, that could give us some negative momentum.
• 11:45
  Speaker 1: A lot of traders will see that.
• 11:46
  Speaker 1: A lot of traders will therefore sell out, and you can draw a similar line on NVIDIA here, by the way, which would be sort of that right and you don't want to drop below that.
• 11:53
  Speaker 1: And then the next support.
• 11:54
  Speaker 1: Well, it sort of sits at 100, which is a little extraordinary.
• 11:58
  Speaker 1: I mean, there will be some support levels below that, but that's where the market makers are positioned, that's how people have their put options to hedge and that's therefore it's a pretty long way, right.
• 12:08
  Speaker 1: So, again, stop losses set up, I hope, and therefore you're going to keep those profits.
• 12:15
  Speaker 1: The most important thing is never let your winners become losers, because why do you own stock stocks?
• 12:21
  Speaker 1: To make money.
• 12:22
  Speaker 1: It doesn't have to be that stock that makes you the money, you just have to make money.
• 12:25
  Speaker 1: That's ultimately, what it's all about, right?
• 12:27
  Speaker 1: So come and watch the masterclass.
• 12:29
  Speaker 1: You'll learn a ton in that.
• 12:31
  Speaker 1: And here is something that makes me chuckle Pfizer is at I don't know, know, not all-time low, obviously, but it is.
• 12:41
  Speaker 1: It is really really tanking.
• 12:42
  Speaker 1: You see the same pattern in most pharma stocks.
• 12:43
  Speaker 1: You know all the backs push us and all that.
• 12:44
  Speaker 1: And it is, of course rfk is coming for you and I like the sound of that.
• 12:49
  Speaker 1: Um, there could be a rebound here in these.
• 12:52
  Speaker 1: Um, far too early to get into that, for sure.
• 12:55
  Speaker 1: But something to watch.
• 12:57
  Speaker 1: And the theory on that is if he bans ads.
• 13:00
  Speaker 1: So TV ads and I mean American television is permanently blaring on some sort of ad.
• 13:06
  Speaker 1: I don't understand how you put up with it.
• 13:09
  Speaker 1: To be honest, in a it also makes it very hard for other people to go in there and advertise and bring out new drugs.
• 13:22
  Speaker 1: So the people who have the drugs out there, the people who have the distribution channels through their drug dealers sorry, doctors, mds they've got the channels.
• 13:34
  Speaker 1: It's a bit like tobacco, right?
• 13:35
  Speaker 1: Tobacco advertising was banned and tobacco has never been more profitable.
• 13:39
  Speaker 1: So I don't think Pharma is out yet, but it'd be much more interesting to see what he does at the FDA and how the approval processes work and if he gets rid of the corruption in science, because that would really hurt Pharma, because then they'd have to actually show that stuff works in a genuine independent study, not the paid for studies that we have at present, and that could be a very interesting thing.
• 14:07
  Speaker 1: So, be watched out space.
• 14:08
  Speaker 1: But yeah, I have no pharma stocks.
• 14:11
  Speaker 1: I have no more biotech stocks.
• 14:14
  Speaker 1: The only things in the sort of health space I have are sort of analytical people and that kind of stuff.
• 14:20
  Speaker 1: You do the testing and stuff like that, and that'll still be required.
• 14:23
  Speaker 1: But, yeah, be a little cautious on that.
• 14:24
  Speaker 1: Similarly on your LLYs and your NVOs and so on.
• 14:29
  Speaker 1: Just be a bit cautious.
• 14:30
  Speaker 1: I think they'll do very well in the long run because the drugs are amazing from an output point of view.
• 14:37
  Speaker 1: You could just go to the gym or eat less cake, but that's less popular and I've offended the chubsters.
• 14:44
  Speaker 1: Now, oh dear, viewerships declined 50%.
• 14:47
  Speaker 1: I mean, it's fine, right, if you're overweight.
• 14:51
  Speaker 1: You chose to be overweight.
• 14:53
  Speaker 1: Nothing wrong with that, right?
• 14:54
  Speaker 1: I chose to be very slim.
• 14:55
  Speaker 1: I choose to do that.
• 14:57
  Speaker 1: It's a choice, it's just.
• 14:58
  Speaker 1: You know, people say it's a disease.
• 14:59
  Speaker 1: No, it's not.
• 15:00
  Speaker 1: It's just calories in, calories out.
• 15:03
  Speaker 1: It's a very simple equation.
• 15:08
  Speaker 1: Anyway, these guys make it much easier than going to the gym, so they'll continue to do well, I think.
• 15:10
  Speaker 1: But I think the whole pharma sector is going to have this overhang till it's really clear what RFK is going to get up to and I hope he's going to get up to a lot, just for the benefit of humanity.
• 15:18
  Speaker 1: So watch out for some great, big, beautiful breakouts.
• 15:22
  Speaker 1: I just spotted one today here.
• 15:24
  Speaker 1: Actually, that looks very, very good.
• 15:26
  Speaker 1: I might mention it tomorrow, so you see how it pans out.
• 15:29
  Speaker 1: Not to hold it back.
• 15:31
  Speaker 1: But I think sometimes people they don't understand what's going on, they jump on the wrong thing and I don't really want that.
• 15:35
  Speaker 1: So learn, that's what it's all about.
• 15:38
  Speaker 1: You've got to learn how to spot those breakouts.
• 15:40
  Speaker 1: Go to phoenixfriendsorg, get free, and it might just get you into a position where you can actually do whatever the heck you want.
• 15:48
  Speaker 1: Now you might be wondering why is this a shorter session than usual?
• 15:51
  Speaker 1: I am at a Christmas tree lighting event, which should be rather fantastic.
• 15:55
  Speaker 1: I'm sure Santa will be there, you know sort of pre -season and all of that and we're going to eat and enjoy ourselves and have lots of cookies in homage to the Chapsters watching this.
• 16:09
  Speaker 1: And if you're offended by this, then you're probably on the wrong channel, because I tend to offend everybody.
• 16:13
  Speaker 1: So watch the masterclass.
• 16:15
  Speaker 1: My friends, felixfriendsorg, slash, get free.
• 16:17
  Speaker 1: And if you want to get those daily buy and sell alerts and then from Trade Vision, then go to Trade Vision and there is a week's trial and you can test it out.
• 16:26
  Speaker 1: If you like it, you like it.
• 16:27
  Speaker 1: If you don't, you cancel on day six or day seven and we won't bill you.
• 16:31
  Speaker 1: We are about to launch trade tracking as well, which means you'll be able to track your profits from your trades, which will be super cool.
• 16:39
  Speaker 1: So lots of stuff happening over there and I thank you for watching it.
• 16:44
  Speaker 1: I thank you for tuning in.
• 16:45
  Speaker 1: I wish you amazing success today and hope to see you tomorrow.
• 16:49
  Speaker 1: All the best.