Christopher Uhl - OVTLYR 对 $NVDA 的判断变化

Big news. We have Nvidia earnings coming up this week. So, this is going to be a Nvidia earnings preview show. We're going to We're going to take a look and dissect the stock, see if it is worth your time and your money, and see if it's something you want to hold into earnings.

Now, here, full disclosure right up front. A, I have no trade on in Nvidia or Nasdaq. So, I have no dog in this fight. Completely uh agnostic to what the outcome is going to be.

So, this is a full uh top-down look at Nvidia earnings right now. So, first thing that I want to look at right here, Joe, and Joe is my my co-host, director at Outlier. Joe, what first thing I notice right here is is we're coming into earnings on a lot of weakness. A lot of weakness on Nvidia. In fact, Nvidia's down 2 and 1/2% right now. That's That's a pretty bad start to the day here.

>> Yeah, you can see the price is below the 10, below the 20, below the 50. It's got overhead resistance. And actually, Chris, if you look at those volume bars, I know you're not necessarily a volume guy, but those volume bars, the tops of those are declining. So, volume is even dropping off here as we go into earnings this week.

>> Yeah, you're totally right, Joe. In fact, let's let's zoom in on this over here. So, what we're talking about is current price right here. We got one more day until earnings come up. But, Joe's totally right. Look at the fact that volume's been declining. Now, Joe, usually when you see volume declining like this on a declining move like that, um typically that means that it's not a lot of conviction in the sell-off. That's what that means right there.

Now, um that means that there could be a lot of people who are excited to buy it at a discount, right? Maybe they're looking to buy the dip. But one thing that I like to stress is there is no strategic advantage to buying the dip. You want to buy the rip. You want to ride that rip. So, what do I mean by that? Over here, right? Over here, you can see how you made so much money on the way up leading up into this earnings. This is one of my all-time number one favorite plays is the trade a stock up into earnings. In fact, I traded this stock in April leading up into earnings. Who would have thought? So, I put my money where my mouth is. So, this is where I took the trade on April 10th. I wrote it all the way up and I closed the night before earnings. Now, it did rocket higher after that and of course we can't see the future. So, it was a risky proposition that I did not actually rocket up after that. I got a sell signal at that point. That's what it was. Uh but I still had a free trade. It was a fantastic trade over here. That's not the setup we're seeing today.

And in fact, uh one thing I noticed just a minute ago was we have a huge amount of overhead resistance right here. In fact, using this outlier block, so at Outlier Quantitative Research, we do have these outlier blocks that are 100% free and included in our Discord once you get access to the Outlier platform. Look at this right here, dude. Look, the first time it came up into this area, monkey hammered. The second time it came up into this area, monkey hammered again. Now, the more times that this is knocked on, the more times it's hit, the more the weaker it gets, right? Because think about it. This is an area of stuck buyers. They bought thinking that the stock's only going to go up and then it went down. In fact, how far down did it go? All my notes are going to pop up when I do this, so just so you know. It went down 16% and then at one point it was down 16 and a half percent and it's taken it 96 days, nearly 100 days to get back to break even. And these people are selling as fast as they can. Selling with the selling with both hands.

So, as Joe was mentioning earlier, we're under the 10, which is your short-term moving average. We're under the 20, which is your intermediate-term moving average, and we're under the 50, which is your longer-term moving average. Now, what we want to see if we're going bearish, if we want to be bearish on the stock, the 10 under the 20 and price under the 50, which is what we saw over here. If we're bullish on the stock, we want to see the 10 over the 20, price over the 50. That is mathematically a bullish or bearish trend. It's not up for debate. It all it is is price and time and because it's just math-based, it's not arguable, okay? There's going to be plenty of trust me bros out there to say, "Trust me, bro. Now's the time to buy it." But legitimately looking at it today, I'm not sure I want to put my money right here.

And in fact, uh Nvidia's numbers should be good. Oh, no, that's the most dangerous word in finance right there, Joe. Could be good. I don't know. Let's see why they should be good leading into earnings.

Now, why do we care about Nvidia? This is like the largest dude, the second largest dude in the whole market right here. So, where the where the Nvidia goes, the market flows, okay? If Nvidia doesn't do much, the market's going to be cool. If Nvidia has a big nasty down day, that's not good, right? So, for example, Nvidia's down 2.4% today, the spy's down 20 basis points, and Nasdaq is down 80 basis points. So, it is pulling the market down today. If it has a big scary nasty down day after earnings, could be even worse.

So, let's jump into this video here and learn why Nvidia numbers should be good. Should be good, Joe. >> For that, for more on what to expect from Nvidia next week, let's bring in Stacy Rasgon, Bernstein senior semis analyst. Stacy, uh great to have you. What are What are you most uh listening for as we get these numbers? >> Yeah, you bet. Um so, they report next week on Wednesday. I think the the numbers broadly should be very, very good. We're we're entering right into the start of the Rubin cycle, which is their next-generation platform. Um they've already given kind of color for growth through this year and actually into next year. And actually, we're looking we're hoping that they may even uh take that up. They said a trillion dollars unbelievably over three-year period which would suggest something close to $500

Um I think if you look at some of the build plans and and things like that for the new platform, numbers that are higher than that start to become pretty plausible. And so I'd love to see if they would actually commit to that or not on on this print.

Um beyond that I think we're looking for the sustainability of gross margins. I'm particularly things like memory pricing and wafer pricing is coming up and they priorly said that they could hold gross margins in the current range which is sort of mid-70s and love to see them uh continue to confirm that.

And then finally I think any color on some of the uh the financing backstops that we've heard recently, there's been a lot of um uh news flow around some of the the the financing for data center projects which could be hundreds of billions of dollars and Nvidia in some sense has been sort of um donating their credit rating kind of um and offering backstops for some of those deals. And so any more details we can get on that I think would would would be uh useful and helpful.

>> Stacey, it's Karen. Thanks for being on. So do you think that that last thing you talked about, this credit issue, is bigger than the actual earnings or what the gross margin is? How much of the story is is really resting on that?

>> Yeah, I I don't know if the story's resting on it but but I mean the the dollars that are looking to get spent are large um and there becomes this question of of of how to pay for it. And I I think all the questions of the returns and things that they can drive that in my mind are starting to get more and more settled in the favor of of the idea that there is a return. But some of the customers that are potentially looking to do this, they're they're startups, even big startups, but but they're startups and they don't have the kind of track record. And and so the fact that there is a backstop of of the leases and other things I think to help that get going I I think is okay.

>> So I have no idea what he's talking about. Like I do not know at all what backstops, what orders, what credit rating, no idea whatsoever. But I do have all the data at hand. So, let's take a top-down We'll come back to this video, but what I want to do is I want to take a top-down approach looking at Nvidia on its own, okay?

So, first off, the first thing that I see when we look starting at the market and then the sector and then the stock. Looking at the market, this is not good. All three major indices have sell have sell rankings here. That's not a great place to be. So, let's jump into Nasdaq. In fact, Nasdaq, I sold my entire position in Nasdaq before this 80 basis point move down today. So, I'm not upset about that. But, what we can see right here is the Nasdaq is pushing down. Now, in the Nasdaq, which Nvidia is in the Nasdaq. In fact, if you want to see what's in the Nasdaq, I'll show you over here. Oh, look, a lot of Nvidia right there. In the Nasdaq 100, a big giant portion of it is Nvidia, okay?

So, when uh Was that you, Joe? What was that? >> Yeah. Yeah, that was me. >> What the blazes, Joe? Can't trust you. Anyways, sell signals in place on the Nasdaq. The fear and greed on the Nasdaq has peaked and it's coming down a yeah, slightly. It's starting to push down on the fear and greed. The average fear and greed score of everybody in the Nasdaq, that's why I pulled this up over here. The average fear and greed score of everybody in the Nasdaq has peaked and it looks like it's starting to flatten out and come down as well. And the number of buy signals versus sell signals is going down as well. So, not a great place to be.

Now, let's dive a little bit deeper. This is in the tech sector, so we can go into the tech sector. We can see the tech sector uh right here in the last week is second worst. And uh in the last month, third from best. So, a little bit of conflicting information over here. Let's go look over here at the tech sector. This is the tech sector right here. So, the last week, not so great. In the last month, pretty good. But, you'll notice over here that the number of buy signals versus sell signals, market breadth in the sector has really tanked. This is the same market breadth number that I just showed you a moment ago. But, let's dive deeper. Let's go into the tech sector. And this is in the semiconductors if I'm not mistaken. Semiconductors. Let's look at the semiconductors. Yikes. Yikes, Joe. Look at that. It's down for the day, the week, the month, the quarter. But it is up on the year and the half year. And if we look at the semiconductors over here, oof. Oof, only 18% buy signals and falling fast. Falling fast. That's not so good.

So let's go take a look over here. Let's go take a look at it. Yeah, Nvidia, um one of the top ones right here, shows a sell signal that came in just today. So then you got SMTC, sell signal. You've got ADI, sell signal. Let's sort by average volume. And then I only want to look at stocks with positive back tests and no partial betas. All right, so there's Nvidia right there at the top. Then you got Intel also in a sell. Then you got Micron that still has a buy. Now here's the thing. AMD also has a sell. Marvell has a buy. Uh NVTS has a sell.

And we just saw a moment ago that the sector is not looking great and then the industry is not looking great at all. Now, why I mention that is a rising tide lifts all ships. You've heard me say that before and it's true, right? If there's a theme in the market like there was like there was a few months ago with um AMD, with Nvidia, with Micron, with um you name it. There were all these semiconductor stocks that were pushing up higher and higher and higher and they looked like they could never come down. They looked like they could never ever ever come down. That's not where we are today. Let's go to Nvidia. That's not where we are today. It's falling down hard.

Let's go to AMD. Like these are contemporaries, right? This is a stage one, two, three on Nvidia. I'm sorry, on AMD it could be looking at a stage four soon. Could be, I don't know. Let's go to Micron. I don't predict the future. There's all kinds of jokers on the internet that will do that, but I don't do it. Stage one, two, three, and Nvidia again. If its contemporaries are struggling, you expect it to be the one outlier that's just pushing that's not that's not Nvidia NVDA. There we go. I mean, I'm just saying. It would be very difficult, in my opinion, to build a bullish thesis in this case, given the fact that the market's looking weak, breadth is looking weak, the sector is looking weak, the industry is looking weak. Joe, you really think this one dude is going to hold up the whole the whole industry, sector, and market on its own?

>> It it really doesn't it doesn't look like it's going to, and I wouldn't put my money on the line to find out if it's going to or not. I'm I'm more of a wait wait to see the trend change sort of guy. >> Yeah, I agree with you, Joe. I wouldn't be buying this here. No way. Not at all. But, but maybe maybe with the circular financing and the the backstops, I don't know. Let's learn more.

>> Nvidia has clearly a a lot of money and balance sheet to deploy. It's another one of their strategic advantages beyond technology and ecosystem and everything else. And I mean, I personally I'm I'm kind of hard pressed to think of a better use of their excess cash versus investing, you know, in the ecosystem to grow it and and and develop it around their their products. But, there's been lots of headlines and lots of big numbers and not a lot of details on how this stuff is really going to work yet. And so, I think color that they could give on that would would be helpful. I think it can help me to put some investors' minds at at ease on on some of this.

>> So, Stacy, it's a great company. It always seems to knock it out of the park when you bet against them. Why the underperformance and >> That reminds me, Joe. You never have a big enough position when you win, and you're always way too big when you lose, right? That's that If you If you have experienced exactly that, type a one in the chat because that's exactly the experience I've ever put on. But yeah, that's funny. Now again, it may be a great company. It really may be the best company in the history of humanity. But right now, the market's telling you, "We're not loving it today. We're not loving it today." Once the earnings come out, maybe that'll change, right? Maybe that'll change. But the way that the market works is an imbalance in fear and greed. So whatever their earnings come out as, they may be stellar numbers, they beat everything. But if there's still an imbalance on how much fear there is, it's still going to push the price down. And people will be repricing that fear and greed once the numbers come out.

But right now, the market's telling you, "We're not loving it today. We're not loving it today." Once the earnings come out, maybe that'll change, right? Maybe that'll change. But the way that the market works is an imbalance in fear and greed. So whatever their earnings come out as, they may be stellar numbers, they beat everything. But if there's still an imbalance on how much fear there is, it's still going to push the price down. And people will be repricing that fear and greed once the numbers come out.

Let's finish up on this video here. >> And even if they have another stellar quarter, what makes me believe that my money should be put into that stock that's underperformed drastically its peers? >> Yeah, and and to be fair, like like I'll be honest, I think it's going to be a good print. I don't know what the stock is going to go in the near term. Like most of my coverage has reported earnings. By and large, they've all had very good prints. And I I've barely had any stocks actually go up um the the day after the the print. So like I I I guess we'll just have to to see. Um that being said, like everybody's

>> I want to say something snarky, but I get it. >> [laughter] >> I get it. It sucks, but I get it. >> getting excited about they've been excited about AI. Like none of AI ultimately works if if Nvidia is is not working. The stock has treaded water a little bit about a year or so. Um investors have been playing more of the the things that I think were viewed as having higher torque to the upside. They they were there was a big thing around the bottleneck plays, for example, for for quite a while. I would say that recently Nvidia has started outperforming. I think your your chart has showed it a little bit. Um some of that started to reverse. I think if you look at this over the last month, the SOX index is down about 5% and Nvidia is actually up 4 or 5%. So it's actually started a little bit of a reversal relative to the rest of the group over the last month or so. And I would be hopeful that that can continue cuz like I said, I do think we are right at the beginning now of their next product cycle which those product cycles tend to be good things for for for the stock um when they get going and we're there. So, I would hope that that can reverse.

Um in this environment though, I'll be honest, I I don't know what the stock's going to do. Um but I do think the numbers will

>> That's the writing. That is exactly the answer, Joe. I don't know what the stock's going to do, but so many people look for random guys on the internet

But, this news that they're going to be tapping the general account now, then you talk about the levels. Uh from a technical standpoint, you say we're back to the levels before we saw that breakout. We were pretty range bound for a couple of months, right? Um do we see another breakout? I mean, what does Nvidia, what does Jensen, what does Mr. Washko have to say?

Well, I want to remain consistent as I have been on Schwab. Uh you know, I I still feel that these seasonal headwinds plus some of this angst caused by now, uh you know, this little treasury spend we didn't expect um and inflationary concerns, oil still above 85, still higher for longer, could put a little damper on this rally going over the next 6 to 8 weeks. So, that is why 7620 is a level we're watching. If it doesn't hold, I don't expect a catastrophe, but I expect a little bit of a pull-off. We haven't had that 5% drawdown yet this year since we had it early in the year, but since we went on this miraculous bull run starting in April. So, I think a setback, a pause is is going to happen.

Nvidia could be the one thing that maybe helps us prevent that. We'll see how they report on Wednesday afternoon. What do you make of the market positioning ahead of that? Because I mean, the chips are having a tough time. They're struggling this morning. Is there some sort of momentum unwind, you know, ahead of that report, do you think?

A little bit of an unwind, but more of a rotation. And where are we rotating to? Sectors that don't really have the muscle to lift this market much higher. Energy, only 3% of the S&P 500. Material sector looks great. Healthcare. These are

Joe, did we not just say exactly that? And you don't have to guess. Come over here, sector sector list view, and it'll show you who's moving. He said materials. He said healthcare. He said energy. It's exactly There are sectors in energy that don't bounce around short tweets. So, it allows us to evaluate those. Yeah, absolutely. And those catalyst risks are what I'm trying to avoid. Just like you're trying to avoid getting stopped out on your trades. Me too. Me too.

are sectors where we're catching bids. The overall breadth still positive, but the heavyweights, they're kind of just taking a breather. You've seen the volatility in some of these memory names.

Let's finish up what he's going to say over here about Nvidia. I want to see what he says. It will remain, but the trends longer term are intact. What we're getting is a little bit of a reset there. Semiconductors are interesting, and then there's storage software, and we're seeing winners and losers there.

#nopressure Mr. Binnie. Okay. >> Yeah, we're going to stay >> #outlier. I I would prefer #outlier.

a lot of time talking about Nvidia this week, but you mentioned a couple of other names that had due to report. And No, I I mean, you could go crazy like Uncle Blucho over here. Bro spent 36 minutes typing all this in. I think he deserves a #outlier back at him. That's what I think.

Where's tech sector? >> Number three. >> There we go. Tech sector, and then software application down here. Okay. Are we in the way, Joe? Yeah, there we go. Okay, cool. Software application. Not bad not bad on the performance metrics, but not a lot of support. There's not a lot of help generating uh uh some some other buy signals to help

And it seems like it was a good opportunity cuz now the market's down about 1% further and who knows how much further it's going to go, especially with Nvidia's earnings coming up. especially with Nvidia's earnings coming up.