Wednesday May 28, 2024 - The biggest one of them all, Nvidia, reports after the close.
40:06 Share

Bill Gunderson.

And welcome to the Wednesday. It's Wednesday already. It is the May 28th live edition of the Best Stocks Now show with professional money manager Bill Gunderson, president of Gunderson Capital Management. And I'm not here with Barry Kite, our chartered financial analyst today. He is at one of his boys' shows.

graduation today which uh... certainly uh... worthy of getting some time off for something as important as that the market is definitely taking the day off here on nothing's graduating except uh... after the close today we're going to get the biggest earnings report of the entire earnings season

Kind of weird that it happens at the very end of earnings season instead of the very beginning. But the market pretty much on hold right now. The Dow is dead flat at 42,344. The NASDAQ is down 13 points right now to 19,185. The S&P 500 is down two points at 5,919 points.

The small cap's down a quarter of a percent right now. Boy, not much of anything happening today. We've got interest rates up a few basis points here. We're at 4.47%. Not much has happened since that big downgrade of U.S. debt.

Gold is up a little bit, 13 basis points, and Bitcoin is down today, $1,869. So welcome to today's Best Stocks Now show with professional money manager Bill Gunderson, president of Gunderson Capital Management. And I am flying solo today as Barry again is at work.

one of his son's graduation exercises today. And we have got a hold, a hold on the market today. There's not much commitments one way or another as investors hold their breath on what has now become the biggest earnings report of the entire earnings season. And it happens after the close of the market today today.

When Jensen Wang's NVIDIA, which was just a graphics chip company, or graphics card company, they had the best graphics card of all for all of those PC and online gamers companies.

And it morphed into the biggest AI chip company of all with their Blackwell chips, the latest version of the high-speed chips. And just remember, every time you go on chat GPT or Grok or any of the other AI programs and ask it a question, it takes a lot of chip power to

A lot of calculations take place in those data centers to give you an answer back, and sometimes in a split second, and that's where those NVIDIA chips come in. Well, we had a huge day in the market yesterday, and, of course, that came on the heels of the announcement on Sunday, I believe it was, that there would be a 90-day pause for

on the EU tariffs, which were going to go as high as 50%. I think Trump would have followed through with that for sure, just like he did with the Chinese tariffs of 140%. But it seems to me that the two sides are getting along just fine and they're working together.

In Europe, the EU, in good faith, said, you know, we need just a little bit more time to work these things out. After all, they've got a lot of members there of the EU that have to agree, whether it's Italy or whether it's Belgium or whether it's Germany. A lot of different economies, a lot of different leadership styles. They all got to come together and agree on

But they do have a fairly sane and rational person leading the charge there. She's been around for a long time there in the EU. And the two sides seem to be getting along just fine. The Dow was up 741 yesterday. Man, it's come a long way since my article at the very bottom of the market.

And by the way, I did write a sequel to that article. Oh, I didn't take a victory lap pounding my chest saying, I told you so, I told you so. That's all I did was present the facts. I've really written four macro articles since the year 2020.

My other big one was in 2009 when I said a new bull market was being born. New bull market was being born. That was in my newsletter right at the bottom of the market. And then I followed up with the bottom at the bottom of COVID at the bottom of the NASDAQ. And recently here at the bottom of this 20% plus sell-off when things looked really dark.

I went somewhere quiet, thought through everything, did a lot of studying, a lot of pondering, and in the end I wrote that, you know what, this is going to turn out okay. And so far it has. We're back to where we were before this all started. And then some, and we did have a big 741-point rebound yesterday in the Dow.

119 in the S&P 500, 462 in the NASDAQ on those EU tariff extensions. That's what drove the market yesterday. What's going to drive the market today? Really, we don't have any catalyst. That's why the market is in a wait-and-see mode today.

Again, as it waits the biggest earnings release of the most anticipated earnings announcement of the season. You know, over time, it's been different stocks that have been that one that everybody was looking for. Apple held that crown for a long time. Tesla held that crown for a while. Everybody looking forward. What are they going to report? It's going to impact the entire market. Well...

Nvidia will likely continue its double beat streak, which is maintained for the last seven quarters. But investors will be more tuned in to gross margins and levels of growth. Shareholders also want more clarity surrounding China, which should make for lots of discussion during the post earnings call with CEO Jensen Wang. I might tune into that one. That's going to be an interesting one.

NVIDIA had previously warned of a $5.5 billion write-off due to export controls on its H20 chips.

and related hardware. So stay tuned on what that means for guidance. Guidance, that's the important word, going forward. The market is forward looking. It more than likely has already priced in whatever earnings they're going to report today, unless there's a big miss and the market had it wrong.

But it's that all-important guidance that will be really key to what NVIDIA does. And let's not forget, NVIDIA is a member of the Dow, and NVIDIA is a big member of the S&P 500, and a big, big member of the NASDAQ.

We know that President Trump to the Middle East secured NVIDIA a place in the Stargate project for the UAE. Yes, they're going to build a dome, an invisible protective dome against missiles like Israel has, and they'll probably more than likely play a role in the Golden Dome, which we're building, although we don't yet know the geographic areas of that Golden Dome. I did see an interview with

Lockheed Martin CEO and he was talking about all the Components he's talking he was talking 20 years out I don't think we have 20 years to be honest with you the way Iran and in Russia are going But he was talking about the key components of such a Golden Dome Nvidia will also be selling its GPUs to Saudi Arabia and along with the mag 7

NVIDIA shares have staged a big comeback, big comeback. It continues to be our biggest holding at Gundersen Capital Management. But following that pause in the Liberation Day tariffs, trading at 135 a share, NVIDIA is now unchanged year-to-date. It's gone nowhere year-to-date. It's gone down and then back up, and now it's flat.

Options trading already indicates that big price swings could be in store with the gain or losses as much as 7% for the AI chip maker after the closing bell. I don't know. It's hard. You know, it's really hard to predict what a company will do. NVIDIA had that long string of just unbelievable numbers. Well, it's hard to continue to report unbelievable numbers. They became more believable.

And the earnings reports recently have not sent the shares soaring. In fact, they've been much more toned down. And if anything, they've been a little bit negative for the company. I honestly don't know what to expect. I think it's better to look at the five-year target price rather than where it's going to be tomorrow. We'll be right back. ♪♪♪

And welcome back here to the second quarter of today's Best Docs Now show.

with professional money manager Bill Gunderson, president of Gunderson Capital Management. Well, there are other stocks out there in the market besides NVIDIA today. The nuclear stocks extended their rally yesterday as Trump's orders boosting sector resonate. And not only is he trying to really grease the skids of getting approvals. I saw a

A uranium mine permit in Utah got approved in two weeks. That's the kind of red tape that they're trying to move out of the way to really help with a couple of things. Rare earths.

minerals number one which china is starting to loosen up a little bit on they do have that leverage over us i don't think anything's ever going to come from the ukraine deal not with putin uh aiming his missiles that way constantly uh i think our best hope well we've got under the sea we've got little mermaid down there looking uh what's that stock does pretty well actually tmc keep your eye on that that's uh

Oh, let's see. TMC, the name of that little stock, which is looking, the metals company. It's Canadian-based. They are exploring the battery metals from the seafloor for those rare earths. That's a healthy chart on that stock, believe me. And the nuclear stocks have also been very strong, even though they're five years out, okay?

Trump is aiming to expand U.S. nuclear energy production capacity from 100 gigawatts, there's a gigawatts in 2024, to 400. So quadrupling our capacity by 2050. All right, therein lies the problem. That's 22 years from now. It's going to take some time, but we're headed in that direction.

New scale, obviously, SMR was up 17.4%. That's one of the more promising as it relates to that small modular reactors. Cameco's been doing real well. I've never had any luck with Cameco. I don't know what it is. I just have a jinx every time I buy Cameco. Some kind of problem comes along. But Cameco does own a big piece of that Three Mile Island complex.

You've got Centris Energy, LEU. It was up 12.8%. It's a uranium stock. Oklo is probably my favorite of all. Oklo is another one in that small modular reactor space. Lightbridge is an interesting one. They're coming up with a new improved fuel system.

for powering nuclear, LTBR. Constellation Energy is probably the blue chip in the group.

They've been around the longest. They're in the Baltimore area. Three Mile Island is part of their portfolio. And then, of course, Texas Vistra, VST. These are all good companies. You've got BWX, which maintains nuclear facilities. You've got Uranium Energy, UEC. Or you just throw your hands up in the air saying, I'll buy you.

I'll buy a nuclear ETF. And there's three that I know of. NLR, I believe, is the one that really focuses on a nuclear. URA and URNM focus more on the uranium part of the equation.

So anyways, that's been quite a rally there in those stocks. Anfield Utah, okay, Anfield Energy, that's where that is. That's the name of that company. I don't know exactly where it is. It's in the San Juan County. I'll have to look that one up.

A-N-L-D-F, their uranium mine approved by the U.S. after just a two-week environmental review. It's usually two years at least just for the guy down at the permit office to open up the file to look at it.

You know how that permitting process and all of those EPA studies and going to court and judges stopping it and judges blocking it and go back and back and forth. Anyways, this one, two week environmental review, trying to grease the skids to get this stuff through.

You know, whenever a bond offering comes out, I just like to let you know where we are right now in the bond market. Northrop Grumman, which would be, to me, in my mind, a fairly safe bond, five years, you're going to get 4.65%, 4.65% for five years. Now, I know a lot of people out there that would be just...

happy with that to get their principal back after five years and that coupon along the way obviously there's a little bit of risk but you don't have that interest rate risk you do if you sell the bond before it comes due

But if you hold it to maturity, you're going to get back what you put into it, your capital. And I have looked at all these different alternative investments. That has become a massive cottage industry in my industry.

selling alternative investments that supposedly aren't correlated with the stock market. The problem is most of them are correlated with the stock market. I find that non-traded REITs were one of the worst ideas of all time. That was my take on the whole thing. Not only did you lose your liquidity, why would you buy a non-traded REIT when you can buy a traded REIT that has a long track record of

And if you don't think REITs are correlated with the market, just take a look at what they did during the last bear market in 2008 and 2009. They went down 80%. They're very much correlated to the fortunes of the stock market. And I just decided in my own mind...

You know what? A good quality corporate bond going out five years, you're going to get somewhere in the 4.5% to 5.5% range. You're going to have very little fluctuation on about 10%, 15%. We do that for the people or a portion of your fund that you don't want that volatility and that stock market risk. What is it correlated to?

Well, it's mostly correlated to interest rates. That's where you get your fluctuation between the issuance date or the purchase date when you buy the bond and that maturity date. And we continue to own many bonds for our safe folks. We own Netflix. We own App Lovin'. I mean, I could go on and on with some of the bonds that we have handpicked.

in that area. That's what we call our safe money and that for us is our alternative investment. You know, I don't like what's going on with Putin. I watched last night several different news reports. I listened to a couple of the talk show hosts that I like to listen to.

And it's hard to make sense of, you know, other than Putin wants to go further than just what he's already captured in Ukraine. He may want the whole enchilada. And, you know, I think countries that step up to Putin and threaten him, Germany is planning to collaborate with Ukraine on making long-range missiles. That puts Germany in the crosshairs. That's not a good situation over there with Russia.

And with Russia getting these drones from Iran, they're buddy-buddy now these days. We'll be right back. This is Bill Gunderson. Thank you for tuning in to today's Best Stocks Now, Best Inverse Funds Now show. I put several hours of research in during the wee hours of the morning each day to bring you the very best cutting-edge stories that I can.

To get two free weeks of my newsletter, go to GuntersonCapital.com. To talk to us about our fee-based only money management services, call us at 855-611-BEST. Now, back to the second half of the show. The instigators, because there's something in there. We've got to get together soon enough.

And welcome back here to the second half of today's Best Stocks Now show where we've got the markets on hold.

I'm looking to do a little bit of buying today. I thought the market was a little bit overheated yesterday. Pulling back just a little bit today, which makes for better entry points into a lot of stocks that I've been drooling over here recently. And why is it in hold mode? Because the biggest report of all, the big one, comes after the close of the market today. When?

Our friend Jensen Wang and his little company NVIDIA, which is now the biggest publicly traded company in our markets, will report their quarterly earnings report. They'll report how much they did in sales. That will be compared with the same quarter last year, so we know what kind of growth trajectory that they currently are on. It will also include their bottom line earnings report.

after all expenses and that will be compared with the same quarter last year so we know where their earnings trajectory is and those numbers will be compared with not only the same comparable quarter last year but what the analysts have come up with and what they've been modeling and we shall see you know it's it's always a flip of a coin

I would just say this, that NVIDIA had a long string of really good earnings reports, and the stock really reacted well after those reports. I'd say about the last three or so, they put up good numbers, but the stock is just kind of, you know. But it is back to 135. And as I said before we went to break, I focus on that five-year target price. For me, that's the key. You know, that takes a lot of the emotion in the short term.

It's very difficult to predict the market. But when you look at what the growth looks like for NVIDIA for the next five years and what the earnings look like today, and if we extrapolate those earnings out over the next five years at what we think the growth rate will be and apply a reasonable multiple. I mean, the S&P 500 multiple right now is 21%.

That's a pretty good place to start with your multiple on an individual stock. Now, yeah, there's a lot of stocks that don't trade at that multiple, 21. The housing stocks, for instance, and the airline stocks, some of those trade at single-digit multiples. I look at the historic multiples that companies have traded at. I look at the overall multiple of the market, which is about 21 right now, and I look at

at the growth rate because that impacts the multiple. And last but not least, the interest rate environment. We've got high interest rates, multiples compress. If we've got low interest rates, multiples expand. That's why you saw such fat multiples in the year 2020 coming out of COVID-19.

We had almost zero interest rates and all that money sloshing around. And now we got $6.92 bags of Doritos. I was shocked. Just a bag of Doritos. It's printed right on the thing. I mean, that's the list price, $6.92 for a bag of Doritos.

That came from that huge bout of inflation, which, yes, the inflation's moderated, but the prices haven't come down. I don't think you're ever going to see that $6.92 come down any more. But that's the Dorito watch. Big Macs will still run you about $5.50. And a McDonald's combination meal will run you about $12 these days. That's the impact of those inflationary years we had.

since from COVID up until now. Bank of New Zealand cuts by 25 basis points. How come every bank, central bank in the world is cutting interest rates except Jerome Powell? Well, he blames it on the tariffs. That's the unknown. Well, the other countries, they have tariffs. They're going to be impacted by tariffs. They're cutting interest rates.

I think he's got a little personal thing against Trump myself. But, okay, it is what it is. We're at 4.5% on our 10-year, while the rest of the world continues to cut interest rates. China could ease up on rare earth curbs. That Cold War between us and China seems to be warming up just a little bit. But that is one of the...

the, you know, one of the edges that China has over us, one of the leverage points. And, of course, you know, you look at semiconductors and you look at a lot of other things out there, especially in technology, and rare earth minerals are a big part of that. And I haven't really heard of any discoveries recently. You know, we did, he tried Greenland. That didn't go very far. Now Greenland is budding up with Europe, with the EU.

China has been blocking those rare earths. He tried Ukraine. That seems like a pretty dangerous area. Would you go to Ukraine as a miner and run a company there looking for rare earth minerals? I don't know about that. And then, of course, under the sea, Utah, Nevada. These are all the areas. If you see any rare earth, let us know because we need them.

We still have more earnings, not just NVIDIA. Let me see who else is going to report today. Does anybody really care? Well, Salesforce reporting. They're a member of the Dow, like NVIDIA. Kind of hard to believe that there's still a Dow stock that hasn't reported. Hewlett-Packard is going to report. Macy's has reported. We'll get to that here in a minute.

And then tomorrow, Costco, the darling of the retail industry. It really is. I mean, look at the multiple that Costco has traded at up in the 50s, mid-50s. People love Costco, and they're willing to pay nosebleed. Compare Costco's P.E. ratio versus Walmart's P.E. ratio. Even though Walmart's sales dwarf Costco's sales,

Costco gets a glamour multiple, while Walmart gets more of a retail-like multiple. Marvell will report tomorrow. That's a pretty big one. Kohl's, which could be terminal, we'll see. Kohl's was floating those 10% bonds. I don't know if they had any takers. I think you'd have to be crazy.

to buy a 10% bond five years out on Kohl's. Will they still be around five years out? Federal Housing Agency to discuss something big on mortgage fraud. Now, I don't know if that has happened yet, but what caught my eye, number one, Bill Pulte is the director of the Federal Housing Finance Agency. I got to believe that's Pulte from Pulte Homes.

He knows a thing or two about the mortgage industry and the housing industry. But mortgage fraud is a big thing. Who is it? The New York Attorney General, Letitia James, caught up in mortgage fraud. But the interesting part is a big player that the government will be working with will be Palantir.

Alex Karp's company. They're going to have a big press conference today. Fannie Mae and Alex Karp and Bill Pulte. That's an interesting trio there. Here's your stock of the day. SPRO. How come you didn't tell me about this one? I'm out there in my listening audience. Up 189% today. Boy, did we miss that one.

Well, before today it was a $0.60 stock, and now it's $1.98, headquartered in Cambridge, Massachusetts. Probably got some links to MIT or to Harvard.

But they announced that their drug, tabepinem, which is an oral treatment for urinary tract infections. You never know what we're going to talk about here on the Best Docs Now show. Uranium, you know, all kinds of rare earth. And urinary tract infections, otherwise known as UTI. Citing an interim analyst conducted by the studies, blah, blah, blah.

It looks like it's having very good results. What's the symbol? S-P-R-O. And the big drug partner here is Glaxo, G-S-K, which has not been a very good stock over the years. I'll tell you a stock that's starting to wake up. And I own it in the relative value account portfolio.

And I'm thinking of adding it back to my dividend-paying portfolio. QSR, Restaurant Brands, that's our friend Patrick Doyle that turned around Domino's Pizza. They seem to be running with firehouse subs. They own Tim Hortons, they own Popeyes, they own Burger King, Burger King.

And one other one, Firehouse Subs. It seems to me like they're running with the Firehouse Subs franchise rather than the Burger King, which is kind of hard to revitalize that thing. And the Popeyes, I see them closing stores, and it seems to me like he's kind of zeroed in. Firehouse Subs is going to expand its presence in Mexico.

As the chain's global growth quest continues, that stock's been breaking out recently. A potential major turnaround play taking place there at Restaurant Brands, which is QSR. We'll be right back. ♪♪♪

And welcome back here to the final segment of today's Best Docs Now show. Well, the latest business plan seems to be going around Wall Street, pretty much championed by micro-strategy companies.

which is now, what did they change their name to? Now it's MSTR is now called Distrategy, I think. No, it's still called MicroStrategy. Here's how it goes. This is the business plan. You float some bonds, borrow money, and you go out and buy Bitcoin with it. And that's kind of been MicroStrategy's business plan here for the last several years.

They continue to lose money three years in a row. They have negative net income. But now the latest one to get in on this craze is GameStop. I mean, they've tried everything else. Why not buy Bitcoin? And that's what they're doing. They're the latest company to stockpile Bitcoin with a $500 million position. So you're basically buying the stock.

And their balance sheet, which contains Bitcoin. They really don't have much of a business anymore. And that's the business model for GameStop these days, which is still a $14 billion company, believe it or not. And, of course, they ran all of those short sellers out of business, some of them, several years ago when the Reddit gang teamed up.

and ran those guys out of town. GameStop is headquartered in Grapevine, Texas these days, and Bitcoin is the name of their game. Robinhood launches desktop trading in UK, targeting seasoned investors. Well, I bring up Robinhood because it's been a very good stock. And I would say this about Robinhood. It has the force behind it.

And the force, I would call the 20, 30-year-olds that walk around staring into their iPhone, which there's plenty of those out there. And Robinhood seems to be their brokerage of choice, allowing them to trade online. I would say second to that is Interactive Brokers.

But if you look at Robinhood stock versus, for instance, Morgan Stanley or Raymond James or Ameriprise, you'll find that this stock has done far better. It's given some big returns, and it's been a very strong momentum stock. In fact, let's just look at the Best Stocks Now app, the app that I invented to help me manage stocks.

Money in the market, the performance of Robinhood over the last 12 months, the stock is up 243%. The tariffs aren't hurting it. During that same period of time, the S&P is up 12.5%. Over the last three years, Robinhood has delivered to investors 87% per year. That's just the compound annual growth.

of the stock over the last three years. Take a look at where the stock was three years ago, where it is today, and you apply that CAGR formula to that, you come up with 87.2%. So far this year, it's up 77.2%, one of the biggest winners in the market overall. That's all, of course, looking backwards, looking forward.

My target price on Robinhood is $134 per share. It's currently trading at $65. Yes, it trades at a very rich multiple, but they've been growing at a very rapid pace. So we own Robinhood in our ultra-growth portfolio, which you ought to take a look at sometime how that portfolio has done since I created it back on January 1, 2019.

I started it on Seeking Alpha when they asked me to become one of their premium authors that people can subscribe to. And I do have a lot of subscribers out there on Seeking Alpha. I'm in the chat room all day.

Of course, anything I send out on Seeking Alpha through the chat room also goes out to my subscribers through the Best Stocks Now app or through Gunderson, through Best Stocks Now, and they get the same messages. But Seeking Alpha, I started those portfolios for them. Check out the Ultra Growth Portfolio sometime, what's currently in it.

and what the compound annual growth rate of that thing's been since January 1st, 2019. Robinhood is currently one of the stocks in that portfolio. Rocket Labs gains as analysts point to upside from Geost acquisition. I've had bad luck with Rocket Labs. I know some government employees that think the world of the stock, which kind of competes a bit with SpaceX,

And, you know, has contracts with NASA, I believe, building spacecraft. Headquartered actually in Long Beach, California. Rocket Labs recently hit a new high, almost. It's at $29.20. But it's very speculative, RKLB.

Whether or not they'll be profitable, they're moving very close to profitability. Their sales growth has been pretty good, up there in the 30% to 50% per year range. RKLB makes a recent acquisition, and the analysts think it will be accretive. Maybe it will push them over across the line to profitability. Let's see. A couple more here. We've got one minute. Macy's.

They report earnings, the stock up 1.1%. Hard to get excited about Macy's. Abercrombie & Fitch, on the other hand, is up 24.2%. 24.2% after a very strong earnings report. Very surprising that a mall-based retailer, I think there's probably a lot of short interest in the stock.

And then the last one to report was Dick's Sporting Goods. Not only did they beat, they reiterated their guidance, and the stock is up 0.6%. Some of the bricks and mortar stores that are still around, still hanging in there, but just barely in some cases. Okay, well, we're out of time. The four-week trial...

wherein you get all the trading alerts, the full Monty newsletter on Saturday, and access to the app. You can go to GundersenCapital.com. Just the education alone.

is pretty, I think, pretty good for anybody that has interest in the markets. And if you'd like to talk to us, I mean, if you own all the dinosaurs of yesteryear, you know what they are. Or if you're in just a very dull asset allocation 60-40 strategy, not doing very well these days.

Give us a call to talk about potentially having us manage your portfolios for you. 855-611-BEST. That's 855-611-BEST. Have a great day, everybody.

This show is not a solicitation to buy or sell any securities. Bill Gunderson or clients of Gunderson Capital Management may have long or short positions in stocks mentioned during the show. Past performance is not indicative of future performance. Gunderson Capital Management is a fee-based registered investment advisory firm. All accounts are held at Charles Schwab. Schwab is a member of SIPC and FINRA.