Jim Worden on NVDA Bull Case, Energy Risks & INTC, PLTR, MU in Portfolio

to trading 360. I'm Marley Kayden live in our Chicago headquarters. It's time to spotlight the state of the tech trade. Joining us, Jim Ward and CIO of Wealth Consulting Group. Jim, great to have you on, of course, a very big week with the center of our week, the Super Bowl of earnings as everybody looks ahead to Nvidia coming our way. But a very interesting setup for Nvidia. I mean we're down again today about 2.25%. They've almost erased their monthly gains. They had a little bit of momentum on their side. How are you looking at Nvidia as we come into this earnings report. And what are your expectations for the name? Thanks so much for having me Marley. So I really still love Nvidia. We we still love it. You know, right now technically it's kind of in this trading range. It still is quite possible that this thing breaks out. It had a little bit of resistance back in May. But I believe it can break out. I know when we look at the street and the analyst estimates that are out there, this heavily does skew toward more upside than downside. The one analyst that has a sell recommendation, it's not that far below where it's trading at now. But the upside, you know, is is much higher. You know, one of the recent analysts put a $500 price target on it. I look at it as a value play within tech. This Nvidia's trading really not much you know more expensive than the market given that it's got a growth margin of close to 75%. We like it as you say. This is this is the Super Bowl of earnings. And for tech. And so we're we're still bullish. Now we're not going to own 8% of it or 6%. Our models are much more focused on diversifying factors. And so we're we're going to have a max max weighting of 2.5%. Okay. I want to dive into that diversification a second. But a couple more things about Nvidia. I mean, you're not alone in your bullish sentiment. I think 95% of the analysts who cover this name have either a buy or strong buy equivalent rating. But as I look over its results over the last, let's call it eight quarters, I mean, they've beat and raised and every one of those six of the eight, they have been lower in the day following the results and seven of eight quarters. They are still lower a month later. So what do they have to say this time around with arguably a different technical setup coming in than we've seen in the past with how they've traded sideways for a lot of this year. That will get them a positive reaction to numbers that are consistently and arguably good to great. Yeah. Look, I think a lot of the story with Nvidia is, you know, people know that they're growing. We all know that that's that's baked into the price. What a lot of people are wondering is when does the growth start fading? When do they grow instead of 50%, you know, they're growing 30%. And so I think a lot of people are looking at that. I think what investors need to pay attention to is that this CapEx cycle is, is really an upgrade cycle of, of old data centers into new ones, but they're still going to be this demand for AI. The AI demand is not going to fall off the cliff next year or the year after. They're still going to be this, this, this runway for demand. And so given that they're kind of the epicenter and the picks and shovels trade, I think that, you know, people just need to realize that this is this is still a great name. It's not going to knock the cover off the ball like in a few few years ago when, when, when this was all new. But, you know, we believe it's a good stable earner. You know, this is this is still got a lot more room to go, we believe. All right. So Nvidia, you're holding about a 2.5% weighting in your portfolio instead of a h is sort of more the standard as you look across more broadly, who else do you like in the tech AI trade? What other names are you looking at? Or are you looking more at ETFs or groups of stocks here? Yeah, we own groups of stocks. And so look we own Microsoft. We own Broadcom. We own Palantir. We own some Intel. We're fortunate to have gotten into Intel like when everyone hated it. And so we've done very well there. We've owned some micron micron. We've had to trim a few times just to the volatility. We own some you know quantum exposure. But it's it's not just all tech. That sounds very very tech heavy. But we we own a lot of boring names in there too. Some insurance companies, some banks, Campbell's and, you know, some other names that don't really show up much in the media. And you are not the first person I've spoken to has mentioned to me the importance of these boring names I had someone even coined boring is beautiful right now in a portfolio. How are you looking at the weighting when it comes to these more popular, hype, headline driven names versus some of these more boring but stable performers? I mean, you just highlighted micron there. I talk about micron on a daily basis. But as you also pointed out, it has been a wild ride in micron this year 100%. And so so some of these names like Nvidia, they get our top weighting 2.5% 2 to 2.5%. Many of the other names get a 1% holding. And so we're holding 60 to 70 names. It's quant driven. We're looking at multiple factors. And I agree with whoever guessed that said boring is beautiful. I, I say amen to that. You know, we, we try to we try to build our portfolio with, with some other names that just, you know, we believe are, are not as loved. Some of these are coming out of a long downtrend and they're coming out and they're just coming back to life. And so that's where a lot of the money is made, you know, and the turnaround also we see momentum getting better value getting better for some of these names. And so just being diversified, not owning everything. That's the current momentum now I think has has worked well. And Jim, we talked about tech and AI names, but we didn't talk about some of the bottlenecks. We mentioned micron. So I'll leave memory off for now. But let's talk about energy. The other conversation I keep having that's tied to this AI build out. How are you looking at energy right now? I mean, we have obviously the volatility tied to oil prices. But then we have this. How are we going to power these data centers that are popping up all over? Are you looking at alternative types of energy? Are you looking at some of these oil names? How are you looking at that bottleneck? Yeah, we have exposure there. We don't own a whole bunch of energy and we're not going to be really, really too different than what the market looks at in terms of sectors. But we own total, we own constellation. We own a little bit of one of the nuclear names. That one is reduced just because of the volatility. But yeah, we're looking at that and we believe that definitely is something that plays a role in the portfolio. We also own an Hvac company that has performed just as well as some of these tech companies. And so we've had to trim that a couple times just because, you know, these things have, you know, some of the industrial and energy names have traded almost with tech. So we have to be careful from a risk management standpoint to not have too much exposure in those names, especially if, you know, they they all start looking the same. Jim, really appreciate you being with us today and taking a look at your portfolio and also the importance of trimming out some of these names when they perhaps get a little out over their skis and keeping a close eye on portfolios as things are