Bodner: Expect "Choppy" September, NVDA Set Stage for End of 2026 Rally

morning and welcome back to Opening Bell. I hope you're having a wonderful Monday. We'll get you ready for the trading day. Jason Bodner, co-founder Money Flows is with me right now. And we look at the stock performance at the end of August. And we see the S&P up 3%. The Nasdaq up over 4%. Oil's down 1% while gold gained 10%. I know you're going to be talking about gold a bit. Some of your thoughts here on now what. You know, we had our pretty great August, which sometimes it's light or quiet. Your thoughts. Yeah. Well we love to look at data money flows. And thanks for having me on. By the way, August is historically a weaker month of the year. So we got a little surprise there. September, however, historically the weakest month of the year, going back to our data since 1990. And obviously we have a bunch on deck, we have PCI, we have jobs, we have the the finale with the fed. So I would expect September to be a choppy month for stocks. And you know, today's type of action to sort of continue. Did you think that the fund flows, which you wrote a lot about where the fund flows, where the interest was going into gold, told you a story? Yeah, it actually told part of this story. It was a little bit of a surprise to see fund flows moving into gold. And we look at that through various ETFs and their flows. And we look at unusual institutional volume moving into funds. So that told us yes, it was moving into gold, which, you know, has historically risk averse. They're seeking safety. But at the same time, we saw fund flows moving into cryptocurrencies, moving into global equities, moving into US equities. So there's sort of a mixed message there. And the mixed message really is it's not a risk off. It's market rotation and funds just leaving one side of the market moving into the other. Yeah. I just actually checked on Bitcoin. I was looking at Bitcoin and Ethereum. And for the month of August Bitcoin was up 24%, Ethereum up over 30%. So it was an incredible run. No doubt the market rotation we certainly saw tech doing very well. The Mag seven for example, the was up more than 4.5% for this month. Do you expect to continue to be a leader between now and the end of the year? Absolutely. You know, if they take a pause in September and October for historic midterm election jitters, I would understand that. But the underlying numbers for tech are just astonishing. Semiconductors 135% earnings growth. And then you have obviously the piece de resistance. Last week, Nvidia's blowout numbers guiding double the revenue that analysts expected 70% revenue growth and just off the charts sales and earnings growth. And he's talking a 20 year pipeline. The AI trade is alive and well. And tech companies are really poised to be beneficiaries, especially the smaller pick and ax plays. So what we see setting up is in a midterm election year, while September, October, historically the weakest months of those years in a presidential cycle, November and December are off the charts, historically speaking. So if we get that type of rally with the election out of the way and fears out of the way, I would expect tech to really do phenomenally well in the back half of the year, the back quarter of the year. So I know you're not a stock picker per se, but you just talked about Nvidia and the blowout numbers that they had and doubling revenue growth and the look ahead for 20 year pipeline. And we think about the Mag seven. Do you think that group is a good group or Nvidia in particular. Feel free to share. I mean you know for investors they want to know should they get in that group. Sure. Well I think obviously Nvidia is the leader of AI. Unquestionably. You know the news stories are circulating around Elon Musk and open AI and obviously essential companies. But the company that continues to execute is obviously Nvidia. I personally have held it for a long time. I don't plan on selling it anytime soon. And to your point, we are actually stock pickers at at money flows. So while I love the mag seven, there are other stocks I really like, such as Arista Networks. They're sort of the networking central nervous system of AI, explosive sales and earnings growth. They just reported quarter two revenue of 3.4 billion. That was up 37.7%. And as networking meets more and more demand, with AI needing faster and faster communication nets right at the center of it. Yeah, it certainly has been an Outperformer. It's not too far off from its highs of $214. It was around 195 at the last close. But over this year, year to date up 50%. So Arista Net certainly has had a run. And you can expect it to continue to run for September. Are you expecting. You talked about the seasonality and weakness. If there's a pullback expecting one and what would you do. What actions would you take. Yeah. Well historically history history says we should expect a pullback in September. Since 1926 midterm election years are the weakest of a presidential cycle. And within that September and October are the weakest. With that said, if we get a pullback, you know, the news stories are Iran, their oil, their rates. Everybody's very sensitive and worried about the forward. But ultimately I think the news cycle is ramping up because of midterm election uncertainty. And the closer we get to that, the more uncertainty there is. Wall Street hates uncertainty. We expect pressure in stocks. With that said, that would be a price problem, not an earnings problem. We just got updated stats on Friday for the S&P 500. 97% of companies reported, I think it was 86% beat earnings, 77% beat sales, and 52% growth is the highest on record since around 2020. So earnings are executing. So if we do get that pullback. To answer your question in September I would be buying some of the higher growth names. Obviously if we get a rate hike that puts a little pressure on growth stocks. But the amount these companies are coming out and beating sales and earnings expectations are enough to shrug it off and continue great growth. And I see that in tech. I see that in the AI trade. I see that in semiconductors chips. Yeah I think tech is really strong group. And then also health care was on your radar. I guess when you talk about the broadening out of the market, you like diversification because you talked about the safety of gold, but also that the market is looking to Bitcoin and all different sectors and such. So those are equities in particular being some more risk on versus risk averse. What about health care. Is that an area you like and think will lead. I do like health care. You know, historically speaking, that's that's a place people sit around for some safety to during election jitters. So we've seen a nice run there. We've seen a lot of growth. And obviously we saw that lights out announcement, Merck, Moderna and their cancer treatment protocol. So there's a lot to be excited about there. But looking under the hood there's still great sales and earnings growth. Some of the companies that I really like in healthcare are also kind of stealthy. Tech companies like Viva Healthcare Systems, they manage sort of cloud data management for doctors, patients computer communication protocol, etc. and they've had just phenomenal sales and earnings growth. So yeah, I think there are great opportunities to sort of play both sides of the fence in healthcare as we move forward. Understood. All right. Jason Potter Co-Founder, Money Flows, thank you so much. Great