NVIDIA and Apple: The Next Big Opportunity in Markets

You shouldn't chase today's winners, long-term. Although, after a session where the Dow did the 138 points, yes we lost 0.79% and the Nasdaq tumbled 1.55%. I think it's time to circle back to tech to make some money. Why? Because the sector that is tech is wonderfully robust versus other groups and it's just been clobbered back to where I think is very near the buy zone again. Despite Iran, wonderful things should happen to tech at a drop of a hat. Take last week. I've been saying that Meta house should do something big with its excess compute capacity. They're just leaving a lot of money on the table. Literally the next day, Meta does exactly that, confirming a story I'd helped break the week before. A simple acknowledgement of something that seems so obvious that has given you a nearly 100-point gain this month. They have to sell some of that compute. Now, compare that with Pepsico, a company that used to give you consistent low double-digit growth with a a stock that had declined to the point where it seemed like it would be easy to beat expectations. Nope. Pepsico, it crushed [snorts] you. By a simple stroke of a pen, Meta gives you almost 100 points. By dint of a weak quarter, Pepsico takes a severe beating. In the end, the tech companies, especially big tech, just have a lot more to to offer the rest than the rest of this market. Look, we know that there was big money to be made in SK Hynix listed on Friday because they kept the spot stock tight. Today, SK Hynix gave up a huge amount of gain, but not all of it. Money was still made. Again, tech is dynamic. This time, SK Hynix is benefiting from the same memory shortage that made you fortunes in Micron and the data storage stocks and the semiconductor capital equipment makers. They keep rallying because there's literally not enough of their product going around and that is not changing and it might not change until 2028. >> But then consider the opposite. Try to be thoughtful for a second. Solstice Advanced Materials acquisition of Element Solutions. That's a $14.5 billion deal announced this week. We had Solstice on the show. The rationale for the deal was frankly brilliant. They're putting together a modern-day materials Colossus. By the way, including the key materials needed to make semiconductors for nuclear power plants. In another time, both stocks would have rallied. Instead, right out of the gate, both stocks were losers. They got killed. Now, ultimately, I think it would be a good deal. I'm actually going to buy for the charitable trust, but we have too many stocks right now and Solstice is being lost in the shuffle and it just won't work. Now, consider the possibilities this week. I don't know if you saw, but once SK Hynix started rallying on Friday, so did Nvidia. Now, this was a big deal because Nvidia's been trying our patience. Right? I think buyers of SK Hynix sold Nvidia stock to get into the SK Hynix deal. Why Nvidia? Because it's big, it's liquid, it's doing nothing. If you sold a lot of Nvidia to get SK Hynix then got a small piece of that Hynix than you wanted, well, then you had a lot of leftover cash to be able to put back in Nvidia. Same for if you sold the SK Hynix, flipped it into strength on Friday. So, the buyers moved Nvidia up to 210 even as it pulled back hard again today. Can the stock go higher? No, actually, I don't think so. Not unless the company dramatically expands the size of its buyback and gets much more aggressive. Nvidia needs to make the claim that Apple used to do when I used to hector them about why they weren't more aggressive about buying other companies. They always said because there was nothing cheaper to buy than their own stock. It's not enough to buy back stock when shown stock big blocks, which is how I think this buyback seems to be run. It needs to walk right behind buyers in lockstep, so they are ready to buy when the stock gets walloped like it was today. If I were running the buyback and I have run a lot of buybacks in my time, I would have gone 208 bid 1 million shares suited for the open. The stock opened at $208.54. If I got hit, I would then bid $207 for 1 million shares. If it dropped to 206, I would have bid two two million two million 206 two million. Same with 205, I'd bid 205 for another two million. AND THEN 204 FOR ANOTHER two million if necessary. Now see the stock only went out at 203 and change, but it would most likely have not gotten that low and the company would have bought a lot of stock. Now the SEC allows a company to buyback stock until 3:50 p.m. It doesn't want the company to manipulate the close, but I watch this stock like a hawk probably closer than anybody else in America. And it's manipulated down almost every single day between 3:50 and 4:00 p.m. almost every single day including today. I don't think it would have ever gotten down to 204 with my method, but it did. The company's getting its stock on the cheap if it listened to me, which is a terrific goal. If I were Nvidia, I would petition the SEC to allow it to bid for stock right INTO THE CLOSE. 4:00 because everyone can see that the last few minutes are artificial breakdown. But again, my point here is that big tech companies always have something they can do to change the equation and that's why I love these things. Look at the food or drug stocks could mention you the same kind of upside. I'd be all over Conagra, Pfizer, but they just don't have that level of control of their own destiny. On the other hand, let's consider Alphabet for a moment. If it were announced tomorrow that Waymo would be a separate company and it would be floated a piece of it to get started. Well, you know what? Who knows how hard it high the stock would go. At this moment, Waymo's self-driving technology is far ahead of Tesla's in terms of trials and data. So, I believe they get a ridiculous valuation. Once it did that, then I think Alphabet's stock would move up dramatically. It would require nothing else to do. It would just show you exactly how undervalued Alphabet really is here, even after it did that big secondary. How about Apple? Oh, the stock's been on a roll, right? Perhaps the biggest worry is that memory-related price increases are already baked into the stock. Or maybe it's because the lawsuit against OpenAI could eliminate any near-term risk from AI hardware. More on that later. But it sure seems like the street's too afraid of Apple's price increases, perhaps because it doesn't understand that the phone companies will end up eating a huge chunk of those costs. They're in a battle royal. Hardly anybody pays full price for a smartphone. They're heavily subsidized by the carriers. So, Apple trades to a new high of 323 before retreating to 317, up almost two bucks. Oh, I'm thinking uh What is it? What does he say? Apple uh uh I want to don't trade it. I wanted so much this week to find a bank stock that could rally 20% like a tech could. But Goldman Sachs my favorite who reports tomorrow morning will most likely have to vastly exceed consensus if it is able to go higher than it is already. A gigantic quarter might only give you a 4% gain. So, I stick with endless tech narratives occasionally veering off to a healthcare company that has some pretty good news or perhaps a retailer that can have a run like a Target or a middleman like Cardinal Health. It shows you it's changing its stripes to help small and medium-sized doctor groups. I will keep trying because that's my job. But the bottom line, after a month where Meta does the obvious and picks up 100 points like this? Tech certainly seems to be a much more fertile ground to plow than any other sector, almost all of which can't help themselves and need a rotation to send any of them dramatically higher. Hey, why don't we start with Jeff in California? Jeff. >> Hey Jim, there's an old saying that says numbers don't lie. Numbers don't lie. Numbers don't lie. I put in $66,000 for this stock about 2 years ago, Jim. It only went up 862%. It's in a perfect position >> [laughter] >> It's in a perfect position now to explode. This stock has beaten earnings and revenue estimates for 14 consecutive quarters and revenue growth. It's trailing 12-month revenue is $5.22 billion with most recently quarter revenue reaching $1.63 billion. 85% year after year increase. Bam! Jim, $4.4 billion gross profits with little or no debt. This company has incredible cash flow. In fact, the free cash flow is $2.1 billion. Boom! Management has predicted for 2026 free cash flow to be >> What what would this wonderful company be? >> What could it be? This stock is This stock is Palantir, Jim, or PLTU. Double your pleasure with PLTU. It's what >> All right. Well, Planters the wrong people call it. Let me tell you about Palantir. I completely agree with you. I think that uh let's put it this way. I have not necessarily cared [music] about raining. I do like profiting and they make a lot of profit and it's a great company. I agree that Palantir can be bought here. All right, listen to me. I'll keep trying to find you winners, but you [music] may have to circle back to tech because it's so hard to find winners in the other places. I'm going to be tonight. Could the [music] latest Apple case against OpenAI actually derail the company's IPO prospects? I'm digging deeper in [music] that lawsuit and a few others. Then, should you take a spoonful