Nasdaq NVDA Nvidia

September turned out to be a forgettable month for Nvidia (NASDAQ: NVDA) investors as share prices of the semiconductor bellwether fell 13% so far this month. The drop is surprising because there was no company-specific news in that time to justify such a price drop.

No one can claim that Cathie Wood isn't bullish about artificial intelligence (AI). She has been a vocal cheerleader for AI for years, and her Ark Invest funds have invested heavily in AI stocks.

When the going gets tough on Wall Street, investors have often turned to time-tested businesses that offer a history of outperforming the broader market. In 2023, the "Magnificent Seven" fits that definition perfectly.

Several tech stocks, including Nvidia ( NASDAQ:NVDA ), have witnessed a sell-off recently due to persistent macro challenges and concerns about elevated interest rates. Nvidia stock has declined about 8% over the past month. Nonetheless, the stock has rallied by an impressive 191% year-to-date, thanks to the demand for its advanced graphics processing units (GPU) that are needed to build and train generative artificial intelligence (AI) models. Despite macro uncertainty and worries over slowing demand, analysts remain bullish on NVDA stock and see the pullback as an attractive opportunity to build a long-term position in the leading chip giant. Nvidia’s Recent Performance Last month, Nvidia crushed Wall Street’s expectations by reporting a 101% growth in its fiscal second-quarter revenue to $13.51 billion. Further solid margins and top-line growth fueled a 429% jump in adjusted earnings per share (EPS) to $2.70.    In particular, the company’s Data Center segment generated a 171% revenue growth, backed by a spike in demand for its HGX platform from cloud service providers and large consumer internet companies. During the Q2 2023 earnings call, CFO Colette Kress called the HGX platform the “engine” of generative AI and large language models (LLMs), which is being deployed by major companies, including Amazon’s ( NASDAQ:AMZN ) Amazon Web Services, Alphabet’s ( NASDAQ:GOOGL, GOOG ) Cloud, Meta Platforms ( NASDAQ:META ), Microsoft ( NASDAQ:MSFT ) Azure, and Oracle ( NYSE:ORCL ) Cloud.    Analysts Optimistic on NVDA’s Future Growth Expressing his bullish stance, Morgan Stanley analyst Joseph Moore said on Monday that the recent pullback in the stock due to worries about slowing AI orders for Nvidia from Microsoft has created yet another opportunity to buy the AI leader. Moore highlighted that an analyst at a data-centric boutique research firm noted that Microsoft was lowering its H100 requirements for 2024, a concern that was heightened by an SEC filing revealing that NVIDIA has significant exposure to a single cloud customer, which the analyst thinks is “very likely Microsoft.” Moore contended that while he can’t comment on specific 2024 budgets for any single customer, checks show that demand is well above supply for NVDA’s H100 chips in many regions and with several customers. Also, supply chain reports indicate that Microsoft is pushing for more product than they are currently getting, which assures that “there isn’t a near term air pocket with that customer.” Moore reiterated a Buy rating on NVDA stock with a price target of $630, as he expects the company to benefit from continued AI investments, growth in inference platforms, and a B100 GPU product cycle. Like Moore, Truist analyst William Stein is also bullish on Nvidia and reaffirmed a Buy rating on the stock with a price target of $668 on Tuesday. Stein called Nvidia and semiconductor company Monolithic Power Systems ( NASDAQ:MPWR ) his favorite ideas. He believes that NVDA’s chips are the “default choice” for most engineers building AI systems. He also thinks that the company has sustainable market leadership in gaming and autonomous driving end markets. What is the Prediction for Nvidia Stock?    With 40 Buys against just one Hold recommendation, Nvidia stock earns a Strong Buy consensus rating on TipRanks. The average price target of $635.48 implies about 50% upside potential from current levels. Conclusion                                                                  Despite macroeconomic woes, Wall Street remains bullish on Nvidia and sees continued upside in the stock even after a phenomenal year-to-date rally. Analysts expect the demand for Nvidia’s AI chips to boost its revenue and earnings over the long term. Disclosure

Nvidia stock (NASDAQ: NVDA)  has done exceedingly well this year rising by almost 3x since early January. There’s a lot going on for Nvidia. Technology companies and developers have been rushing to deploy generative artificial intelligence (AI) into their applications

While not everyone will agree, under current circumstances, utility giant Duke Energy ( NYSE:DUK ) represents a Strong-Buy, must-watch stock, in my opinion. Fundamentally, the company benefits from a captive audience. No matter what happens in the economy, households and businesses must pay their utility bills. As a result, I am bullish on DUK stock. Fundamental Headwinds Sell the Story Behind DUK Stock Usually, a publicly-traded company must actively sell its case to prospective stakeholders regarding why betting on the subject enterprise offers better returns than alternative investments. However, for DUK stock, the key benefit is that outside negative fundamentals do much of the heavy lifting. In other words, Duke Energy fortuitously happens to sell itself. First, a core incentive for participating in the equities market is to generate capital gains. Therefore, it’s no surprise that entities such as Nvidia ( NASDAQ:NVDA ) blossomed this year. With artificial intelligence and machine learning poised to spark a paradigm shift in economic and social norms, companies powering this transition deserve a heightened premium. However, even mighty Nvidia cannot ignore the implications of monetary policy. Last week, the Federal Reserve stated that it will keep the benchmark interest rate steady as expected. Moreover, policymakers framed the economic backdrop in generally positive terms. Based on the wording, it appears that they’re optimistic about facilitating a soft landing. Still, the Fed also left the door open for one more rate hike before the end of the year. Recently, market sentiment has focused on a read-between-the-lines narrative. Thus, even the surging NVDA fell almost 8% in the trailing one-month period. Interestingly, during the same period, DUK stock has remained flat. With market participants apparently no longer interested in high-flying technology names, the predictability and permanence of Duke’s utility business should attract more buyers. Duke Energy Offers No Trade-Down Alternative Generally speaking, what makes discretionary investments vulnerable ahead of a possible market downcycle is the trade-down effect. Basically, consumers can almost always trade down to cheaper alternatives of discretionary goods or services. However, barring an effort to literally go off the grid, utility users can’t trade down their services. For better or for worse, utilities like Duke Energy benefit from a natural monopoly. Essentially, would-be competitors don’t even try due to the enormous barriers to entry, not to mention other regulatory hurdles. And on a related note, users have little choice but to pay up. So, DUK stock is effectively permanently relevant. In fairness, Duke – like many other utility players – doesn’t exactly feature great financials. For example, it features questionable stability in the balance sheet, with cash and cash equivalents of only $20 million versus long-term debt of $69.91 billion as of the most recent quarter. However, what really matters is profitability, where Duke consistently prints positive figures on the bottom line. Now, such predictability means that during decisively optimistic market cycles, entities like DUK stock don’t perform well. After all, it’s gambling on the unknown that often yields the greatest rewards. Nevertheless, when faced with economic uncertainty, any kind of certainty commands a higher premium. Financially, that appears to be the case with DUK stock, which trades at a 15.65x forward earnings multiple compared to the underlying industry’s 18.9x. Options Traders Don’t Agree Before you dive into DUK stock, you should be aware that options traders don’t seem to agree with the bullish thesis. Specifically, options flow data – which screens exclusively for big block trades – shows heightened interest in pessimistic trades since September (either sold calls or bought puts). What’s particularly bothersome is that it appears one major trader sold (wrote) 2,944 contracts of the Oct 20 ’23 85.00 call option on September 1, receiving a premium of nearly $1.26 million in the process. That seems an aggressively bearish wager, given the fundamental relevance of DUK stock. Still, the narrative behind Duke Energy is powerful. People who wish to live normal lives must pay their utility bills. Therefore, while acknowledging the risks, DUK stock seems more like a Buy than a Sell. Is DUK Stock a Buy, According to Analysts? Turning to Wall Street, DUK stock has a Moderate Buy consensus rating based on six Buys, six Holds, and zero Sell ratings. The average DUK stock price target is $99.75, implying 10.7% upside potential. The Takeaway: DUK Stock is an Obvious Play That Deserves Attention With DUK stock, the outside fundamentals do the heavy lifting in terms of marketing the investment proposition. Therefore, despite the noise from the options market, it might help not to overthink Duke Energy. It’s a utility play whose time has come. In my opinion, it’s really as simple as that. Disclosure

Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>

Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>

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