Nvidia (NVDA) and bitcoin (BTC-USD) are rebounding after dropping in Monday’s trading session. Nuveen chief investment officer Saira Malik joins Catalysts to discuss the movement and the broader market rally.
“The recent moves in Nvidia and bitcoin are telling us that investors are becoming a little bit more cautious. Under the surface, I think there are cracks in the economy that we need to be concerned about, from weaker consumer data to employment markets that are starting to show signs of weakness,” Malik says. She notes that Nvidia is back to its early June levels, and as long as the AI trend continues, it will remain in a good position.
She believes that second quarter earnings will catalyze the tech industry, adding, “We need them to keep beating and raising. And people will then say, ‘OK this stock is worth more than where it’s trading today.’ Until then, I think it can remain more in a trading range or even soft, because it’s just trading on people’s momentum and flows in and out of the tech sector.”
For more expert insight and the latest market action, click here to watch this full episode of Catalysts.
This post was written by Melanie Riehl
Video Transcript
We’re going to get to it with our next guest on what that latest data alongside recent pressure and some of the big tech names means for markets.
Joining us now to discuss we’ve got s may like new Chief investment officer here with us on our stools.
Thank you so much for coming in.
We appreciate it that consumer confidence data doesn’t seem like it’s going to be a huge catalyst for the market today.
So I want to dive in on the tech story we’re seeing in video turning around a little bit here.
One of the move that you’re seeing in NVIDIA and even Bitcoin tell you about this market rally right now.
What’s the broader thesis you can drive from it?
The recent move in video, Bitcoin are telling us that investors are becoming a little bit more cautious under the surface.
I think there are cracks in the economy that we need to be concerned about from weaker consumer data to employment markets that are starting to show signs of weakness in video.
Though bigger picture, it’s just back to its early June level.
If you look at it versus the semiconductor index, it’s actually not an expensive stock, it trades at a discount to the index.
So longer term, I think the A I trend is still in place.
It’s going to increase productivity for companies.
But as of last week, tech was looking overbought the amount of flows that had gone into the sector.
You know, the market had been eight out of nine days in a row.
It’s, it’s time for a healthy bit of a sell off in that area.
But I think longer term, the fundamental drivers in NVIDIA and A I are still intact.
Should this be viewed as a buying opportunity?
Some of this recent weakness.
Well, it’s hard to tell in the short term swings in stock prices of where you would catch the bottom.
Are you catching a falling knife?
Are you really hitting the bottom here?
You know, we can watch technicals to try to figure it out.
That’s a bit tough.
I think the catalyst for tech will be second quarter earnings though in a few weeks.
If NVIDIA can continue to beat that hurdle, beat the bar for earnings.
I think the stock will recover until you get to their earnings number though.
Is there a lot to say?
Where’s the bottom?
That’s tough because that’s trading on momentum and investor flows right now.
So last question I have for you on video, at least what settles this stock, right?
What would be the catalyst to put it in a range?
That’s a little bit more based on the fundamentals based a little bit less on, you know, seasonality and trends.
Like the fact that we’re heading towards the end of the month, what will cause the stock to just settle a little bit here.
What’s been the driver for mega cap tech earnings has been, has been quarterly earnings.
If you look at first quarter earnings, tech drove earnings.
So we need to get to those earnings numbers.
You saw that last quarter with Meadow, which put up very strong numbers.
Even Apple starting to settle on earnings was the beginning of the rally for apple, NVIDIA.
Same thing we need them to keep beating and raising and people will then say, ok, the stock is worth more than where it’s trading today.
Until then.
I think it can remain more in a trading range or even as soft because it’s just trading on people’s momentum and flows in and out of the tech sector.
