To The Moon

Hello, Tigers!

This week, alongside a wave of earnings releases from U.S.-listed Chinese companies, all eyes are on Nvidia, the “king of stocks,” which will report its earnings after the market close on Wednesday. How should investors strategically position themselves this week?

1. Nvidia: Can it beat expectations again?

Nvidia is set to release its Q3 earnings after the close on Wednesday. The key focus will likely be its Blackwell GPU lineup. However, Nvidia's lofty valuation has raised doubts among analysts and traders about its continued upside.

Bearish Analysts:

Some analysts argue that the excitement around Blackwell GPUs may be overdone. While these chips could accelerate Nvidia's growth as the leader in the AI GPU market, current investor expectations seem excessively optimistic, exposing the stock to valuation risks.

Bullish Analysts:

Conversely, Nvidia’s top customers continue to heavily invest in AI infrastructure, hinting at long-term growth potential. For instance:

• Google: Q3 earnings revealed consistent CapEx, with servers and data centers, including Nvidia GPUs, as core expenditures.

• Microsoft: Increasing Azure-related CapEx, with an estimated 50% allocated to servers.

• Amazon: Expected 2024 CapEx of $75 billion, primarily for AWS.

• Meta: Forecasts $38–40 billion CapEx in 2024, with Q4 spending exceeding $15 billion.

Analysts note that these spending trends align with Nvidia’s anticipated revenue growth, potentially enabling another quarter of earnings outperformance.

2. Chinese Companies in the Spotlight

A. Internet Giants

Pinduoduo: Analysts highlight Pinduoduo’s undervaluation, driven by explosive revenue growth surpassing JD and Alibaba. While China’s economic stimulus policies could boost consumption, their mid-term impact on Pinduoduo’s fundamentals will require time.

Baidu: With a 10% free cash flow yield, Baidu remains undervalued. Despite mixed earnings forecasts, its strong non-GAAP EPS growth and below-industry P/E ratio suggest upside potential. Analysts expect valuation recovery with potential further stimulus measures in China.

B. EV Leaders

Xiaomi: Xiaomi’s Q3 revenue rose 30.5% to RMB 92.5 billion, with net profit at RMB 5.3 billion. Its electric vehicle (EV) segment exceeded expectations, positioning Xiaomi for 27% compound annual earnings growth. Analysts find its PEG ratio of 0.63x attractive.

XPeng: XPeng’s deliveries and revenue are surging, with Q4 projected to reach record highs. However, profitability remains a concern amidst fierce competition. Analysts emphasize its export growth and new models as key drivers for success.

NIO: NIO plans to launch its Firefly hybrid vehicles by 2026, targeting Europe and the Middle East. While this strategy could reignite growth after a 90% stock decline, analysts stress that improving cash flow is critical for long-term success.

3. Trading Themes This Week

A. Chinese Companies

B. Semiconductors and AI

For more details on Nvidia and PDD, visit: https://ttm.financial/post/372708621713496

Risk Disclaimer: The assets listed are based on data-driven analysis and do not constitute investment advice.