Today, Larry Berman CFA, CMT, CTA and Jim Cramer - Mad Money commented about whether VG-N, DLR-N, BLK-N, GRAL-Q, CTRA-N, DHR-N, NEE-N, PG-N, ABT-N, CMG-N, F-N, VRT-N, AVGO-Q, VST-N, NVDA-Q, V-N, ATD-T, CNQ-T, AQN-T, XDV-T, XEI-T, XGRO-T, VGRO-T, HEWB-T, HXT-T are stocks to buy or sell.
AI
On Friday afternoon, investment in AI by the mega-caps was making headlines. Chips were ripping on Friday, he was writing up his blog, and everything was wonderful.
Then today we have news coming out of China of some competitors. This week, the Fed meeting is not that important. Rather, it's what we hear about capex from big tech, as well as their comments about what we've heard today and the market volatility.
Take a look at the AIQ ETF if you want to play the sector. Looking at gainers and losers over the last year, NVDA and META are at the top of the pack. As is TSLA, which is crazy overvalued right now. The worst performers are those that aren't really kicking it in the AI space.
Look at a chart for the last 2 years, which is when MSFT made its $10B investment in OpenAI. It's still a great sector, with lots of hiccups along the way. Corrections have been buying opportunities. Today is no different. But the question is whether it'll be like August 2024 when we dipped below the 200-day MA, or will it be like the end of 2023 when we tested and bounced off? That's what he's looking for technically.
Watch the long-term trend lines to see if this is the catalyst that breaks the long-term trend. He doesn't think so, but a lot of froth does need to come out of the sector over the next month. Have to listen to how META, AAPL, and MSFT respond.
Very different from the dot-com days, when there were a lot of made-up companies that just added .com to their names. Now, there are a lot of real companies, with real earnings, doing real things that are going to boost global productivity in a big way. But make no mistake, there's a lot of froth that needs some consolidation.
NVDA tanked 17% on news of China's DeepSeek stealing the AI crown from ChatGPT, faster and cheaper. All AI-related stocks, including energy plummeted as the Nasdaq slid over 3%. Buy this weakness or sell? Honestly, he doesn't know. It's confusing. Analysts haven't had time to digest the DeepSeek news. How many NVDA chips does DeepSeek need to work? Will NVDA's numbers come down if customers freeze and reassess their chip orders? Will things turn into the internet pause of 2002, which turned out to be a collapse? Or not? He has no view on DeepSeek, because he simply doesn't know enough. He sold some shares before today's news when shares were much higher to right-size his portfolio. However, the hardest thing is to wait until you know more instead of taking a knee-jerk action.
Shares tanked today on news of China's DeepSeek stealing the AI crown from ChatGPT--DeepSeek is faster and cheaper. All AI-related stocks, including energy plummeted as the Nasdaq slid over 3%. He sold his shares already, but if the stock stabilizes, this may be a buy, because AVGO has a lot of business away from AI-related data centres. However, he doesn't know--this could fall further. It's a confusing situation that happened so suddenly that you have to sit on your hands and wait.
Until the election last November, oil, cattle and corn were trading separately, but ever since have been moving up in unison. Garner says this is similar to the commodities rally in 2022 during rampant inflation. Just recently, though, oil has broken down, and the other two commodities could follow. In coming weeks, oil weakness could persist due to a strong US dollar, persistent inflation, lacklustre demand from China, bear seasonality, and economic weakness in the rest of the world. Meanwhile, OPEC can't stabilize the price with production cuts. And Trump's attitude to drill a lot is driving down the price. If oil can't hold current levels, it will fall to $60-65 soon. Then, could slide to $51. Live cattle: prices are roaring because of the lowest cattle inventory since 1951 thanks to droughts and very high feed costs. Meanwhile, buyers will accept any price--and this trend rarely ends well. In 2014, the market topped, which needed an entire decade to regain that level. Garner notes that recently, the cattle price is making lower highs and that any gains will be temporary. The cattle price could fall by more than 33%.
Gotta love the digitization of the world with electronic payments. Lots of up-and-comers will provide competition. Yet it's managed quite a strong hold in the space. Overvalued, time to sell. Market leader. He'd be all over it around $250-275.