To The Moon

On Monday (24 June 2024), we saw mixed performance from the stock market. The S&P 500 fell by 0.3% and the Nasdaq Composite dropped by 1.1%, both closing at their session lows.

This decline was driven by a significant loss in NVIDIA (NVDA) which fell to 118.11, down 6.7%, and other mega cap stocks due to profit-taking activity.

Amazon.com (AMZN) decreased by 1.9% to 185.57, Microsoft (MSFT) slipped 0.5% to 447.67, and Broadcom (AVGO) declined by 3.7% to 1592.21. Declines was also seen in other semiconductor stocks, Super Micro Computer (SMCI) dropped by 8.7% to 826.98, and Qualcomm (QCOM) fell by 5.5% to 200.84. The PHLX Semiconductor Index (SOX) was down by 3.0%.

Buying activity was robust in other market areas despite declines in the semiconductor sector stocks, The Dow Jones Industrial Average gained 0.7%, the Russell 2000 rose by 0.4%, and the equal-weighted S&P 500 increased by 0.5%.

Tech Sector Layoffs Surge

The tech sector has seen nearly 100,000 job losses year-to-date, according to Layoffs.fyi. Over 340 tech companies have laid off a total of 99,672 employees since January 1. ByteDance (BDNCE), the owner of TikTok, has reduced its global workforce by nearly 2,000 in the past quarter, including 450 employees in Indonesia.

This trend is part of a larger wave of layoffs in the tech industry, which saw more than 260,000 positions terminated throughout 2023.

S&P 500 Energy Sector Perform Followed By Financial Sector

The top performers in the S&P 500 sector were the energy-related stocks and bank stocks The S&P 500 energy sector rose by 2.73%, and the financial sector increased by 0.95%.

Consumer staples was up 1% while information technology and consumer discretionary was down 2.07% and 0.74% respectively.

Bank stocks also outperformed ahead of the Federal Reserve's stress test results, with the $SPDR S&P Bank ETF(KBE)$ rising by 1.9%.

WTI Crude Oil Futures Closed Higher

Energy shares outperformed due to rising commodity prices. WTI crude oil futures settled 1.2% higher at $81.69 per barrel, and natural gas futures increased by 3.7% to $2.81 per million British thermal units.

Note Yield Almost Flat. Look Forward to June Consumer Confidence On Tuesday (25 June)

The 10-year note yield settled one basis point lower at 4.25%, while the 2-year note yield remained unchanged at 4.73%.

There was no significant economic data released on Monday (24 June), but there is June Consumer Confidence report, expected at 10:00 a.m. Eastern Time, followed by $69 billion 2-year Treasury note offering with results at 1:00 p.m. Eastern Time.

Nvidia (NVDA) Price Target Raised By Jefferies

Jefferies has raised its price target on $NVIDIA Corp(NVDA)$ to $150 from $135, maintaining a Buy rating on the stock. The firm noted mixed performance in the AI sector, with Broadcom (AVGO) joining Nvidia's outperformance.

However, concerns are growing for Advanced Micro Devices (AMD) and Marvell Technology (MRVL), as more investors are shorting these stocks. Jefferies believes Nvidia remains a key player in the AI space, with potential growth for Marvell and Astera Labs (ALAB) alongside Nvidia.

Stocks To Watch

Nvidia (NVDA, Financial) shares experienced a significant decline of over 6.5% on Monday, marking the third consecutive session of losses for the semiconductor giant. These losses have resulted in a market cap reduction of approximately $500 billion, placing Nvidia behind Apple (AAPL) and Microsoft (MSFT) in terms of valuation.

Despite these recent setbacks, Nvidia's shares have surged 145% year-to-date, driven by increased data center revenue and heavy spending on artificial intelligence.

$Amazon.com(AMZN)$ is working on an AI chatbot, internally known as "Metis," to compete with OpenAI's ChatGPT. CEO Andy Jassy is personally involved in the project, which aims to create a more powerful version of Amazon's Titan foundation model. This chatbot will provide text and image answers, share links to sources, suggest follow-ups, and offer up-to-date information using retrieval-augmented generation. The project also envisions Metis as an AI agent capable of creating travel itineraries and other comprehensive plans.

Even with the news of Amazon working on AI chatbot, the technical on MACD does show that it is making a crossover upside, but do note that KDJ does not show a rather positive signal, it is showing that J value is trending downwards, that would be we could expect a small dip on Amazon, before we see it moving upwards.

$Iron Mountain(IRM)$ continued its winning streak, closing 0.26% higher at $89.09 on Monday. The company has benefited from the AI boom, led by Nvidia's (NVDA) rally. Goldman Sachs Research highlighted that companies involved in building AI-related infrastructure, including semiconductor designers, cloud providers, and data center REITs, stand to benefit from the ongoing AI trade.

If you are looking for stocks which are benefiting from the AI boom followed by rally, Iron Mountain is a stock we could look at while Nvidia is facing some sell off, which should end soon.

I would be monitoring the price action for Iron mountain to find an opportunity.

Shares of Baidu (BIDU) snapped a six-session losing streak, closing 0.2% higher at $88.7 on Monday. Despite this minor recovery, Baidu has lost over 25% year-to-date. The company's stock has faced challenges, including a 6% decline in the past month. Analysts have given Baidu a Hold rating, with a score of 3.05 out of 5, reflecting mixed prospects for the Chinese internet search giant.

Summary

Nvidia faces losses, and tech sector layoffs surge. If we were to look at the market as a whole, performance is mixed as there are other sectors holding up the DJIA, while semiconductor sector are facing a decline.

We might want to check out some of the other stocks which are benefiting from AI boom and rally, while we do that, we should also looked at some of the financial stocks.

Appreciate if you could share your thoughts in the comment section whether you think stock market could give us a rebound today (25 June) after the consolidation and selloff’s subside?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.