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☕ This could be the week Nvidia hits $1,000

May 13, 2024

Good morning! 👋

It’s great to be back in the saddle after a fabulous road trip to the San Francisco MoneyShow!

Speaking of which, a quick shoutout to all the fabulous folks who have joined us while my bride and I were out of the office. You’re probably wondering what the heck happened because you haven’t heard a peep since signing up!

Short answer, we are a family-owned business and I personally write everything that comes out of our office. Not some big, anonymous publishing house interested in harvesting your email and selling you schlock.

Our goal is to help you buy the world’s best companies and master your money.

I do that by sharing what I’ve learned – the tips, tactics, perspective and more – during the past 44 years I’ve spent in global markets.

Speaking of which...

Roughly 92% of the S&P 500 have reported, 80% of which have beaten expectations.
The S&P Index now sits within 1% of record highs after working its way through a relatively orderly correction over the past few weeks.

Awesome!

As an aside, I really feel sorry for the “smartest people in the room” but none more so than those who continue to give seminar after seminar about how the whole shebang would go to heck in a handbasket. It must be tough to be wrong for so long. 🤦‍♂️

What's next?

I mentioned in my 2024 Annual Outlook (aka the January issue of One Bar Ahead®, our paid research) that I expected the Fed to get benched by summer. Which appears to be right on target as I type.

To be fair, Powell hasn’t actually said lower rates yet, just that his next move is unlikely to be higher.

We’ve seen this movie so many times that we know the script by heart.

Here’s my playbook.

1 – NVDA to $1,000 - this could be the week

People thought I’d lost my mind when Nvidia was trading under $150 in November 2022 and analysts were falling all over themselves to get outta the way.

I, on the other hand, told you that the stock would hit $700 a share within 12-24 months, then once that’d been taken out, $1,000 and/or a stock split.

This morning I’m grinning like a Cheshire Cat.

Analysts continue to realize the error of their ways and get on board. Late but, as the old saying goes, better late than never:

Jefferies analyst Blayne Curtis has taken his target to $1,200 a share up $420 (Read)
Meanwhile, HSBC analyst Frank Lee has taken his target to $1,350, up $300 (Read)

Get ready!

NVDA will post fiscal 2025 Q1 earnings after the bell on May 22. I’m expecting profits up perhaps 5x or more and a 3X jump in revenue.

If I’m right... heck, even halfway correct, shares could easily hit $1,000 in the next few days or weeks at most.

Keith’s Investing Tip: If you missed NVDA, there’s still time to do something about it. As I noted during my keynote address last week in San Francisco, the stock is still tremendously undervalued. A view that the street is also beginning to embrace. Control risk by changing your tactics, something we talk about constantly in One Bar Ahead®

2 – GameStop is Game On

The “Roaring Kitty” is back.

If you recall, he was the individual most associated with the meme stock phenomenon a while back in 2021 when his posts prompted an epic short squeeze that burned scores of hedge fundies’ jets.

I thought he’d been banned from posting about specific stocks, but I am clearly mistaken.

CNBC reports that shares have now run 80% and are halted. (Read)

MyPOV: Wall Street is a funny place so the massive updraft makes me wonder if a) Keith Gill – Roaring Kitty’s real name – is at it again or b) this time it’s Wall Street’s merry marauders. Either way, manipulation is a very dangerous, very alluring game. Where is the SEC?

3 – I warned you this would happen

Companies will increasingly go private, especially if they’re struggling or marginally profitable.

Doing so allows buyers to reform the companies and maximize profits without the brain damage associated with quarterly reporting.

Squarespace is the latest in a $7B deal. (Read)

Other examples include Darktrace, Everbridge and Model N.

Keith’s investing tip: This is yet another reason to focus on the very best companies you can buy because any company on the margin – meaning with lack luster performance is at risk of being taken private.

4 – Budget Big Macs point to a real opportunity

Inflation has hit big fast-food chains hard, including McDonalds.

That’s why I’m not surprised to see corporate pushing for a $5 special to bring lower-income customers back into the fold. (Read)

The thinking is that’ll help boost profits, but the real upgrade will be higher margins on the bottom line when customers re-engage using all the technology Uncle Ronnie’s built in.

It's a tech company that happens to make burgers.

5 – Le Microsoft

French regulators have it out for American tech so it’s par for the course that a company like Microsoft would “Choose France” at Macron’s tech summit by the same name. (Read)

Doing so helps assuage regulators while creating the illusion that the company is making a benevolent decision in France’s interest, at Macron’s behest.

I’m not so sure any of that is true but, then again, I don’t really care much either.

I’m focused on reports that the deal includes the latest Cloud and AI infrastructure along with 25,000 of the most advanced GPUs by 2025... next year.

At the same time, Microsoft will train up to 1 million French by 2027 ensuring that the nation’s people have future-ready skills (which will help Macron politically) and ensure a built-in base of users (that will help Microsoft).

$500 a share within 12-24 months, an implied return of 20.56%.