17/3 Analysis: Why We Can Be 🐂-ish For NVDA & AMD

LMSunshine
2023-03-18

This week has been a very interesting week for investors with plenty of volatility with the VIX spiking, 🏦🏦🏦 collapses, rumors & worries. Through it all, though, there’s been a rush into safe-haven assets like Treasury securities & gold, & to individual stocks like MSFT, NVDA, AMD, GOOGL, AAPL, AMZN, META because of the AI🤖-hype created by the release of GPT-4 & new 🤖 announcements from MSFT🐂🐂🐂 MSFT was not the only 1 soaring, & brought with it an analyst upgrade for NVDA & possible break-out for AMD🥳🥳🥳

NVDA:

⭐️ At one point on 17/3 (Fri), NVDA stock was 3.4% higher. At that highs, the shares were up about 15% for the week. NVDA closed higher each day this week-an impressive feat given the macro backdrop, all thanks to GPT-4 & MSFT🥳🥳🥳

⭐️ NVDA have powered 77% higher YTD when the S&P 500 only risen 2%.

⭐️ NVDA’s valuation “has moved to the stratosphere on near-term numbers,” but Morgan Stanley (MS) still sees the stock as an attractive way to play the semiconductor landscape. Stratospheric valuation was explained to be “trading at a P/E premium to our entire universe.” 😯😮😲

⭐️ MS’s analyst upgraded the shares to overweight from equal weight on 16/3 (Thu), cheering opportunities brought on by the enthusiasm around generative 🤖-the type of 🤖 popularised by ChatGPT & NVDA can help power these applications.

⭐️⭐️⭐️ New price🎯 of $304 from $225🥳🥳🥳 According to the analyst,

➡️“The high capital intensity of these workloads, particularly on the training side, is now a major part of the calculus for the largest companies in technology, with NVDA having dominance in the training market that is likely to persist for several years,”

➡️ Excitement around large-language models, which use machine learning to understand language, “is turning into stronger spending both near term and long term.”

➡️ When thinking about trends on a 5-year basis, NVDA is still expensive, “but not dramatically out of line with peers,”

➡️ There’s even the potential for Nvidia to win at the rest of the computing 🌎’s expense as companies face budget pressures but recognize the importance of investing in 🤖

➡️ “cloud vendors are going to slash spending on traditional workloads to fund 🤖-models.”

AMD:

⭐️ AMD is on its 3rd straight weekly gain & is up fully 61% from the year-to-date (YTD) low. That’s Super Impressive👍👍👍 given the recent backdrop & the S&P 500's 4 declines in the past 5 weeks.

⭐️ After rocketing off the $80 area & thus, the 10-week & 200-week moving averages-AMD stock is running right into the $100 area.

‼️ The $100 zone was notable resistance until an enormous breakout in mid-2021, which then cemented this area as support over the next 12 months. Eventually the 🐻 market caught up with AMD & sent the shares below this key level & it again became resistance.

⚠️ If AMD cannot break out over this key area, we could be looking at a dip back into the high-$80+, its prior resistance that will hopefully act as support, along with the rising 10-day moving average.

🐂🐂🐂 In the event of a breakout, there could be a move to the $110 zone next, followed by $120 to $123. 

Amid the gloomy 🏦🏦🏦 crisis, investors rotated back to tech & chip stocks where growth can be propelled by 🤖 & GOOGL, AMZN, & META gained🥳

$NVIDIA Corp(NVDA)$ $Advanced Micro Devices(AMD)$ $Alphabet(GOOGL)$ $Coinbase Global, Inc.(COIN)$ $NASDAQ(.IXIC)$ 

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