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One way to play Nvidia earnings

Nov 20, 2023

Good morning! 👋

Markets have opened higher, which doesn’t surprise me in the least, as we head into a holiday-shortened week.

There are two things to think about.

First, we’re going to get earnings from Nvidia, which is arguably one of the most important tech companies to any investor over the next decade.

Second, the Microsoft/Altman news will attract all kinds of new money to the party.

Here’s my playbook.

What’s up with Altman—MSFT

Microsoft has snagged Sam Altman, who will head up Microsoft’s new AI team. Greg Brockman is also apparently going along for the ride. (Read) Meanwhile, former Twitch CEO Emmett Shear will run OpenAI as newly seated CEO.

Who wins and who loses?

No question this gives Microsoft a leg up. It also sets up a potential acquisition at some point in the future.

Remember, Microsoft has invested more than $16 billion in OpenAI; that’s why I can easily envision a situation in which the company absorbs OpenAI while also ousting the board that sent Altman packing.

What to expect from Nvidia earnings

I expect Nvidia to post great numbers top and bottom line, a “double” in my book. (Read)

As we have discussed many times recently, the guidance will be critical.

I’ll be watching for two things: a) Continued market demand, and b) how management sees the situation with regard to Chinese export restrictions.

Technically speaking, I see some more short-term shenanigans, but as is usually the case, that’s an opportunity.

Nvidia is up 237.45% year to date, which is why traders may try to pound the stock into submission after earnings and despite good numbers. This will be a boxer’s one-two punch, as I noted this morning to the fabulous Ashley Webster ahead of the opening bell. (Watch)

One way to capitalize on the situation would be to buy putskies (put options) to the downside. Then, use any profits generated to buy more shares as a way of boosting long-term holdings.

Tesla saga continues

I’m in a holding pattern, for reasons I shared with the brilliant Liz Claman during an extended interview last Friday ahead of the closing bell (Watch).

A strategic pivot

I have recommended Danaher several times over the years, and now I’m watching it again. The company has gotten hit hard but continues to transition from a conglomerate-like monster to a very specialized life sciences player.

Shares are down 9.79% YTD, but this could make for an interesting rebound.

Looks like I’ve got some research to do this weekend. 😊

The truth about Black Friday sales isn’t pretty

A new WalletHub report found that 35% of items on offer this Friday—Black Friday—will not be offered at a discount to pre-Black Friday prices. What’s more, the worst categories for sales are apparently computers and phones, furniture, and consumer electronics.

All, as you likely know, have been discount leaders in the past.

The other WalletHub finding that catches my attention is that 28% of American consumers are planning to spend less, which proves that my concerns about retail stocks in general and a weaker-than-expected holiday season could be on point.

Bottom Line

Many aspiring traders and investors want to do “something” because they can... while failing to realize that doing “nothing” is a viable choice.

Wait for YOUR setup, change your tactics.

There is NO rush.

For instance, I’m planning to do very little this week and will consider it a great success if I can pull it off. I will be placing some LowBall Orders on the likes of Nvidia and Tesla specifically… then walking away from my screens secure in the knowledge that I have a lure in the water to catch the big fish if they swim by, at a price I’m willing to pay.

As always, let’s MAKE it a great day, and in an ode to the holiday-shortened week, let’s stay extra frosty.

Keith 😊

Straight to your inbox from Keith himself!

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