Join Bill Gunderson as he navigates through a turbulent market day, dissecting NVIDIA’s earnings and what they signify for tech stocks. The episode delves into stock evaluations, the intricacies of bond financing, and strategic investment choices amidst economic changes. Special attention is given to the potential and pitfalls of major market entities like Google, shedding light on the regulatory pressures and market shifts that could influence future strategies.
He’s been seen on CNBC, the Fox News Channel, and the Fox Business Channel. His articles can be found on MarketWatch, Seeking Alpha, TheStreet.com, and many other places. He’s the author of the weekly Best Stocks Now newsletter and the inventor of the Best Stocks Now app. He’s president of Gunderson Capital Management. Here is professional money manager Bill Gunderson.
SPEAKER 04 :
And welcome to the Thursday, the day after the big NVIDIA report on this November 21st. This is the Best Stocks Now show with professional money manager Bill Gunderson, president of Gunderson Capital Management. And as usual, I’m here with Barry Kydar, chartered financial analyst. The NASDAQ is down. I think a lot of that is Alphabet. formerly known as Google, which we’ll get to in a bit. The NASDAQ’s down 152 right now to 18,813. The Dow, on the other hand, is up 85 points. to 43,493 the s&p 500 is down a quarter of a percent right now to 5902 5902 and small caps are up three quarters of a percent here so far today the bond market’s very quiet The 10-year is sitting at 4.40. Very little change there. We’re getting a new all-time high in Bitcoin today. That’s just a crazy story there. It’s up 2,335. It’s 96,730, soon to become 100,000, it looks like, from my perspective. And oil, gold, pretty quiet here today. A lot to talk about with NVIDIA and Google pretty much in the headlines today. So welcome to today’s Best Stocks Now show with professional money manager Bill Gunderson, president of Gunderson Capital Management. I’m here with Barry Kite. Well, where did we end yesterday? We were awaiting the big earnings report from NVIDIA. And the market did improve towards the end of the day yesterday. The Dow closed up 139 points after being down. The Nasdaq was down just a little bit after being down a lot more. Netflix hit another all-time high yesterday. And Target lost 20% of its market cap yesterday. in just one day, not a good day for Target yesterday. And then, of course, at about 4.20 or so, first we had earnings come in from Snowflake, and then we had earnings come in from Palo Alto Networks, and then the earnings came in from NVIDIA. which we’ll get to here in a bit. But first we begin with the world news, the global news, and we kind of work our way down to the individual stocks. The Biden administration moves to cancel $4.7 billion of Ukraine’s debt. Do we get to vote on that? I don’t know. But let’s just forgive the debt. And he sends more military aid, with just 58 days left in his term. He’s sending an AIDS package worth $275 million. Here’s the one that gets me, which includes nuclear protective gear, Barry, after he authorized the use of those U.S. missiles, which are much more precision-based. and longer range than the missiles they have, and the landmines that he approved yesterday. So anyways, that’s where we are on that front. Just in case. Just in case, here’s some anti-nuclear stuff to put on in case you get a nuclear attack. Okay, let’s get to NVIDIA’s results. You know, when the earnings first came out, I would say at one point maybe it was down 4% or so. NVIDIA reported earnings that looked to be pretty exceptional to me. Let’s see, they beat earnings by 5 or 6 cents, not by a huge, huge gap. but a decent gap, and then they beat their sales by a decent gap, and then they gave guidance. And through the night, NVIDIA was trading maybe down 2%, 3%. It drew even a few times. It opened to the upside this morning. It has been all over the map. And as we look at NVIDIA right now, NVIDIA is down 1.4% to $143.82. Now, it’s charred. Fairly tame, yeah, but, you know, I don’t know what they expect. They also declared a dividend of one cent. Okay, we’re not in it for the dividend, I can tell you that, but it does help us have it in our dividend and growth portfolio. Okay, so I sent out a chart this morning, a one year chart on NVIDIA to all our live trading trial people and our live trading active subscribers and clients that also want to get this kind of information and taught a little lesson and I showed on the chart that I use. where you find the annual earnings growth for NVIDIA. And I circled it. Over the last five years, NVIDIA’s annual earnings growth has been 66% per year. Okay? And this year, 2024, they’re actually in their 2025 fiscal year, so they have a weird year end. Their earnings are going to be up 124% in 2025 versus 2024. And in 2026, they’re looking for 49% growth, okay? And then I also circled where you see the quarterly earnings growth. And it’s no longer 400%. I mean, that’s not sustainable. You finally get into a mathematical issue. Their earnings only went up 103% this quarter, all right? But that I think they were expecting 75 cents, and they came in at 81 cents instead. So, I mean, some of the headlines I’ve seen, NVIDIA’s growth is slowing down. Well, come on. It was at a meteoric pace. Eventually, a jet that takes off from an aircraft carrier is going to start to level off a little bit in its ascent. And, you know, you can’t keep up 455% growth. But they came in with 81 cents versus 40 cents last year. That’s 103% growth in earnings. Their sales were up 94%. So you’re starting to see a deceleration in sales growth. No longer is it 265%, 262%. Instead, it’s a paltry 94%, Barry, which you can compare with, like, you know, Target’s earnings growth, which has actually been negative now for the last four quarters. And, you know, look, eventually mathematics are going to catch up with you. But still, this remains probably the fastest growing stock in the entire market. And then comes the question.
SPEAKER 03 :
Yeah, a couple of things.
SPEAKER 04 :
How long can they keep it up?
SPEAKER 03 :
Right. And that’s where I was looking at in terms of the Blackwell. They expect it to exceed supply for at least several quarters into fiscal 2026. Their other hopper shipments have been kicking off or coming, I think, in the fourth quarter of 2025. So they’re essentially making as much as it can be made and still have additional demand capacity. And when you look at their margins, once they get this Blackwell chip ramped up in terms of new production, they’re expecting margins in the mid-70s.
SPEAKER 04 :
Yes. Remember, Elizabeth Warren wanted to do an investigation of McDonald’s because their margins are, what, 6% or 7%, something like that, on every hamburger they sell. How about an NVIDIA chip where the margin is 70%, Elizabeth? are we going to investigate Nvidia for price gouging here so anyways I mean there’s just some ludicrous things that I see in the market on a daily basis I would just say that if you’re gonna own a large cap growth portfolio how can you not include Nvidia at this point in its life span life cycle how can you not include Nvidia which is by far Now, if the PE ratio were 250, which it’s not, the PE is 56 right now. The forward PE, just doing the math in my head, is about 35 times forward earnings. That compares to the market, which is 22 times forward earnings. But NVIDIA is growing a lot faster, obviously, than the overall market and deserves a multiple bigger than the market. I guess my question would be, when does NVIDIA, when is the world saturated with these high-speed chips, AI chips? And the demand starts to fall off. I mean, how long can NVIDIA sustain this kind of growth? For now, I would just say, you know, it’s a hold, a strong hold for now. Is it a buy right here? Well, I think it needs to get a little momentum back for that, to be honest with you. It needs to break through that 150 area. And if it does, then I would call it a buy once again. All right, we’ll be right back. This is the Best Docs Network. And welcome back to the second quarter of today’s Best Docs Now show. Well, let’s see what the street has to say about NVIDIA earning report. They say, for the most part, results and guidance were exceptional. Wall Street says ignore the noise. Well, there is a lot of noise. There’s been a lot of noise ever since they announced their results today. We’ve got Bernstein analyst Stacey Rasgon raising her price target to $175 from $155. It’s currently at about $148. That’s a good price target raise there, saying that Nvidia’s Q3 results were very solid with record data center revenue at $30 billion, which beat the street’s estimate of $29 billion. Blackwell demand still appears off the chart and is likely to exceed supply for some time. to come with this prospect for a very strong forthcoming data center year still easily in the cards you know i find it amazing that bitcoin which has no fundamentals whatsoever just continues to explode like a rocket ship closing in on a hundred thousand no earnings reports no balance sheet nothing and you’ve got a solid company like NVIDIA, one of the great growth stocks. I don’t think a stock has ever gone from nothing to the Dow in the amount of time that it did. and yet it’s kind of been going sideways here for the last several months. I think eventually you’ll see a breakout. Yeah, $3.5 trillion, biggest company of all time. I think eventually it will break out to the upside, but that’s what needs to happen. It needs to gather some momentum again. Piper Sandler, on the other hand, is being a little conservative with its guidance, given that it’s going through a product transition. He’s got a $175 price target also. That’s usually, what, a six to 12 month price target on these stocks that they put out? I put out a five year price target. Bank of America analyst said the stock could churn, that means sideways in the near term, on the lacked sizzle. But NVIDIA is still the undisputed leader in moving $1 trillion of legacy infrastructure into accelerated systems. It’s also the fastest growing mega cap stock, and it has a solid free cash flow that should provide adequate firepower for cash and returns. So this is coming from Bank of America. They have a price target of $190. So at 148, you would say, hey, that’s a pretty good upside. City Analyst, that’s Citigroup, has a $175 upside potential for them in the shorter term. And they say that NVIDIA remains a stock to own in this AI-fueled market. But the aura of invincibility might be showing cracks. Well, what’s the invincibility? I mean, the invincibility is that they finally catch up with the demand and the supply starts to outstrip the demand and the price maybe starts to go down. A competitor comes along. The only competitors right now, and they’re distant competitors, would be AMD, which really hasn’t made any inroads at all into NVIDIA’s kingdom. And Huawei would be the other one. Huawei is going to have an AI chip of their own sometime next year. Now, are they able to… I’ll wait while my microphone’s messing up on me I gotta get a new one is Huawei cutting in will Huawei cut be able to reverse engineer I would think that would be very, very difficult. If AMD’s not able to do it, it would seem like it would be difficult for Huawei to do that also.
SPEAKER 03 :
Well, you’d always be kind of one step behind, right? I mean, and what’s going to matter, I think, on the AI front, obviously, is speed, which is why there’s really only one chip in the game at the moment. Yeah.
SPEAKER 04 :
Absolutely. Okay, at the end of yesterday’s trading, I kept a little scorecard. There’s an unusual large amount of good stocks in the market right now, but a lot of them are pretenders. And it’s because of all the momentum that came into the market. It’s starting to settle down. But I still have, let me see my list today, I think it’s 900 and so, which is, yeah, 972 to look at. Normally I’m in the 400, 500, 600 range. But I will say this, I kept a little list that maybe has 30 or 40 stocks on it. And I sent this list out to the folks that are on the live trading platform. And 30, 40 stocks, they’re on that list. These are the best charts in the market now. Charts in the market now. Now, I have to bring together valuation, momentum, and chart, all three in one. But I also look at… I will look at the strongest momentum stocks. They’re included in my list of 972. And then I have a list that I keep of the strongest charts in the market. And I would just say that the big shift right now is going into natural gas stocks. And I see a lot of them on my list here, like CNX.com. Comstock Resources, EQT, which is another natural gas stock, EXE, which is a natural gas stock, KGS, which provides fracking equipment, OVV, Ranger Resources, Range Resources, which has been a good one in the past. And, you know, it also seems to be a rotation that’s not really including – The oil producers, but leaning way more heavily to the natural gas producers, and there is a difference. Some companies focus, and other companies do both. But I see that European natural gas prices rise year-to-date to a high, a year-to-date high. That’s UNG, and that’s awesome. risk okay and it would also say to me that natural gas is much more sensitive oil to the heightened geopolitical risk it used to be that any trouble in the middle east and you were going to see you know ability in oil but today it’s it’s natural gas where you’re seeing the geopolitical risk so that’s something to think about and there are some really good looking natural gas stocks right now now when we come back what is going on at google whoa google has a big impact on the nasdaq not a big impact is down 0.7 percent right now this is bill gunderson it’s the best stocks now show we’ll be right back
SPEAKER 07 :
This is Bill Gunderson. Thank you for tuning in to today’s Best Stocks Now, Best Inverse Funds Now show.
SPEAKER 04 :
Now, back to the second half of the show.
SPEAKER 06 :
And welcome back here to the second half of today’s Best Docs Now show.
SPEAKER 04 :
Well, I’ll have a new microphone by tomorrow, thanks to Amazon. But in the meantime, I’ve got to finish up the show here today on my iPhone. The Department of Justice seeks Chrome spinoffs in the case of Google’s monopoly. You know, Barry, it amazes me. Why is Google a monopoly and Amazon not a monopoly? Do you have any thoughts on that?
SPEAKER 03 :
Amazon’s into everything. Or any of your big tech names. I mean, it’s just, I don’t know, it kind of, it’s certainly in a different realm, but it just feels like, you know, it’s almost the equivalent in my book of Biden, you know. allowing missiles in Ukraine. It’s like on the way out, right? I feel like the administration is just firing missiles at some of these companies that they’ve been wanting to. They’re hoping to have four more years of them under their thumb, right? And so I guess at the end here, they’re really wanting to push the issue. I don’t know.
SPEAKER 04 :
Well, I mean, Google dominates the search, okay? NVIDIA dominates AI chips, right? I mean, you could make the case for a lot of companies that dominate a space. For whatever reason, you know, Google became a verb. It literally became a verb. You Google it, and that sends you to the Google search engines, which are very valuable, because then you can pay for favoritism in the search engines i mean that’s why they change their name to alphabet if i want to own the search uh let’s just say uh local investment advisor i could pay a heck of a lot of money right and every time somebody types that in that search brings us up on top Of the search bar, that’s worth a lot of money. In a way, they own the alphabet, I guess. It used to be the yellow pages when I was growing up. To be on the inside cover of the yellow pages cost a lot of money. To have a full page ad on the yellow pages cost a lot of money. To just be listed in the yellow pages cost very little. It’s the same concept. Only Google is a lot more powerful, obviously, than the yellow pages.
SPEAKER 03 :
And they didn’t start out as the only one. I mean, it used to have, I mean, you’ve got to remember, there was years ago, right, you had Lycos. I mean, you can remember all these old commercials of where to go search. And, you know, frankly, at some point they had the best mousetrap, right, in terms of, What drove it to them? And, of course, they’ve created their own ecosystem, especially when you tie it to Android. Not much different than Apple tying you to their ecosystem if you’re using an iPhone or Apple product.
SPEAKER 04 :
Yeah, well, you know, anyways, it’s a problem, and it’s hurting the NASDAQ here today. They want Google to sell its Chrome web browser. Now, I don’t know how you do that. I don’t know if that disconnects them from the Google search. Well, I mean, they went after Microsoft in the day for being a monopoly. So anyway, it’s not hurting. We don’t own Google Alphabet. But this is definitely going to really put a curtailment on any advance in Alphabet stock, which is considered one of the big seven, which is one of the FANG stocks. It’s the G in FANG. So anyways, that’s where we stand today with this action. You know, like Barry said, 59 days before May. And it seems like, I don’t know, it seems like Biden is fulfilling a lot of favors or whatnot, promises in office here. And going after Alphabet as being a monopoly seems to be one of them. Archegos founder Bill Wang sentenced to 18 years in prison over fraud. The reason I bring this up is there’s a lot of similarities and there’s connections between him and Cathie Wood’s ARC funds. Bill Wang was very, very aggressive. He ran the Tiger… Let’s see, it was the Tiger… I can’t think of it. It had Tiger in the name, fun. And he was leveraged At the end, I mean, eventually he had to stop managing public money. And he was managing a family office of money in the billions of dollars that has a lot less regulations than do the hedge fund world. And his big claim to fame is he ran $5 billion up to like, I think, $50 billion, something like that. But he was leveraged five to one. in very few stocks, and he had his position spread out amongst several firms. And each firm did not know about the position that he had at the other firms. So he had huge positions in stocks like Baidu, I remember, was one of them. I can’t remember some of his other holdings. But when that came unwound, that was one of the biggest financial hits of all time in the financial world because these companies that had lent him the money to get so leveraged, they ended up losing billions of dollars, each one of the companies. And these were big companies. I mean, he was with, I don’t think he was with J.P. Morgan, but he was with several banks of that size. Now, the tie to Cathie Wood’s. Well, in the early days, he gave Kathy Woods the seed money to start ARK, A-R-K. And she had kind of a similar style of very, very, very aggressive with no risk management. And, you know, Kathy Woods taking, I don’t know what she had at one time, $70, $80 billion. Now it’s down to about $60 billion has vanished in losses. and withdrawals, but most of it losses, just horrible, horrible returns after she was considered a rock star during the COVID year, and especially 2021 when all of those COVID stocks, or post-COVID, when all those stocks went to the moon, they were calling her a genius. Well, okay, since then, She has had some horrible years, and she has not even kept up with the S&P 500, and with an extraordinary amount of risk. And I read an article about her yesterday because of this Wang news article. And she was let go from Bernstein. And, you know, they said she has a big hole in her methodology, and it’s risk management. Risk management is somewhere saying you’re wrong and cutting your loss and not writing it down into the ground. Risk management is not making huge bets and then doubling down on them as they go down. And that’s what Wang did. To his detriment, now he’s going to get 18 years in prison. Boeing CEO tells employees that the aviation giant can’t afford another mistake. Well, you think that’s a fair statement? Yeah, I would say no.
SPEAKER 03 :
Makes sense. I mean, I don’t know if we’re… As passengers on a plane, I don’t know if we can handle a mistake either.
SPEAKER 04 :
Yeah, I would say the same thing as I get on a Boeing jet. You can’t afford another mistake. And I would say this. I mean, Boeing stock is still very, very weak. Even though they solved the strike issue… The company is still burning through billions of dollars, and it’s really kind of run dry as far as where to turn for more cash.
SPEAKER 03 :
They announced layoffs late last week, and I’m pretty sure, I think, and you know some of those contacts over there here in town, but I think some jobs here are going to be affected here in Charleston.
SPEAKER 04 :
Well, they need to sell jobs. push off the assembly line 38 planes a month to get back to positive cash flow. And I think their latest month was like 13 planes, something like that. So man, I’ll tell you what, they are walking a tightrope right now over there at Boeing. It continues to be a troubled stock in the Dow. And it does look like it’s put in a bottom, but They’ve got to execute. They’ve got to get that production line back up to 38 planes a month just to break even. Okay, let’s see what else we got here today. Well, we talked about Applovin, and I want Barry’s opinion on this. Applovin has been one of the best stocks in the market this year and over the last couple of years. We’re up, I think, over 700% on it. Now they’re going to float $3.5 billion of bonds. And this is an interesting offering, really, because it’s next five years, 5.125%. Wouldn’t you say it’s fair to say we’re in a 4.5% world right now, Barry, if you’re looking at a bank bond or whatever? Sounds like we’ve got to continue this discussion.
SPEAKER 03 :
4.5% to 5%. Yeah, 4.5% to 5%.
SPEAKER 04 :
Okay, now when I come back, why would they need to float bonds at this point in their life? We’ll be right back. And welcome back here to the final segment of today’s Best Docs Now show on this post-Invidia earnings day. Met with kind of mixed results so far. It will settle down, and I personally think it will go on to hit new highs at some point in time. I think it will break out at some point through that resistance level. I’d like to see that happen, get a little momentum underneath it, The valuation certainly supports that. But for now, I guess it’s a debate, right? It’s a debate that’s taking place on the stock. In the meantime, as I look underneath the market here, you know, I’ve started my journey through 972 different stocks that meet my criteria in one way or another here today. I would say it’s a pretty healthy market, especially in tech. here this morning. It looks a lot better underneath the surface. Sometimes you’ll have one or two stocks really skew the market one way or another, and you look underneath those one or two stocks and you see a different story. And I would just say to you right now that I’m seeing a pretty good story here underneath the surface of the market. But there’s definitely rotation taking place in the market. We had a seismic shift. If you didn’t notice, a week ago Wednesday, when the old regime was voted out, the new regime was voted in, and you’ve seen massive, massive shifts and changes. And, you know, people looking ahead. What a two weeks it’s been, huh? Et cetera, right? Okay, why would Applovin, which has gone up so much, why would they float bonds at this point in their life? That’s a $120 billion company, by the way, now.
SPEAKER 03 :
Yeah, great question. You texted me this morning on it, and essentially they’re paying off their current completely senior debt facility that they have now. That’s $3.47 billion is essentially what they’re paying off, and if you look at their weighted average cost of capital for the debt that they currently own or currently have outstanding is roughly around 8.7%. And so they’re turning around. Obviously, their equity position has gotten stronger. Their debt-to-equity position is stronger. And so in this debt environment, right, they’re able to float, what, a million? Let me see. I think it’s a billion dollars at 5.125%, and they’re floating there. another billion for a couple years longer down the road at $5.375 billion, and then another billion at $5.5 billion for what I think it’s due in, I don’t know, 2034. So they’re improving. Essentially, their business has gotten better, and they’re able to get debt cheaply, which is what you’d like to see in a company.
SPEAKER 04 :
Yeah, and I don’t think they’ll have any trouble. No. Finding buyers for those bonds at five and an eighth. We’re looking into them. They may be oversubscribed already. I don’t know. But we’re in a four and a half percent world right now. The other thing I would say, I mean, if a company, their other choice would be to float more shares of stock at this high price, right?
SPEAKER 03 :
Right, right.
SPEAKER 04 :
And to pay off that debt. But, I mean, they’re choosing to go this path, which is better for the shareholder.
SPEAKER 03 :
And it’s more conventional. It’s a more conventional lending facility versus, say, a convertible note, right? The problem with a convertible note is it can be, you know, ends up trading a lot like equity at some point and can dilute investors. You know, this dilute equity investors in this particular deal, it’s a straight debt deal and one that we’ll look into.
SPEAKER 04 :
Yes, we’re definitely going to look into it. How can the individual look into it? Can an individual get in an deal like this?
SPEAKER 03 :
Yeah, most nowadays with bond trading, most folks, you know, you can go to, you know, look at the, you know, kind of what we either call it, you know, bond trading or fixed income, right? You can go there. A lot of them will still let you search by symbol. It may take, I don’t know when these notes are actually going to float. I think it’s fairly soon, usually. Oh, December 5th, it looks like. And so, yeah, sometime around December 5th, you can kind of look there, and a lot of systems will let you search via stock symbol. And then the key is you want to make sure you look at the maturity in terms of how far you’re going out because it looks like four different options here.
SPEAKER 04 :
So you put up $1,000 in increments of $1,000, and they pay you five and an eighth, usually, what, twice per year? Yeah, usually semi-annually. Yeah. which would be five years in this case, you get your principal back. And the principal will fluctuate in between because of interest rates, but nothing like a stock. Nothing like the stock of apps. You may fluctuate maybe 2% or 3% one way or another during the course of the year. So that’s how that works. There’s a lot of people that sell alternative investments that are supposedly not correlated to the stock market. I just say for the person that is happy with something in the 5% range, You know, I think to me that’s one of the better alternative investments to equities. And obviously, I mean, our bond fund owns about 10. We usually put about 10 in a portfolio. So like a $100,000 portfolio, $10,000 each. Now, those are for the folks that can’t stand the volatility part. Look at the volatility in Nvidia.
SPEAKER 03 :
Or help offset the volatility you’re taking elsewhere in a portfolio. So it is truly kind of a similar concept in terms of alternative investment is supposed to reduce your correlation. Well, especially if you’re willing to hold it, a bond to maturity doesn’t mean we will or have to.
SPEAKER 01 :
You don’t have to hold it to maturity either. When you’re modeling it.
SPEAKER 03 :
Yeah, but if you’re modeling it as a non-correlated asset, and it really is if under the assumption you end up holding it to maturity because you’re not worried about price fluctuations in that instance.
SPEAKER 04 :
Okay, well, I’m already thinking about this week’s newsletter. We have a lot of people that have signed up for the free four-week trial. I think this ends their second week. And, of course, a lot of new people have signed up along the way. That offer is still valid to watch the market along with Bill on a daily basis here for four weeks. You go to GundersenCapital.com. I try to teach as much as possible. I give examples, and I let you know what we’re buying and selling here at Gundersen Capital. Again, you go to GundersenCapital.com to set up an appointment with us to discuss… where your suitability lies, where your risk tolerance lies, where your current plan lies, set up an appointment with us at 855-611-BEST. That’s 855-611-BEST. Have a great day, everybody.
SPEAKER 01 :
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.
