'Hot Runner' Nvidia To Hit Speed Bump In Second Half This Year? Here's What A Market Strategist Says
Portfolio Pulse from Shanthi Rexaline
Market strategist Thomas Hayes from Great Hill Capital has expressed caution regarding Nvidia's (NVDA) short-term performance despite its recent rally. He believes the stock's high earnings multiple and reliance on maintaining high gross margins may not be sustainable. Hayes also expects Nvidia and other tech giants like Microsoft (MSFT) to underperform in the second half of the year, while small-cap stocks and ETFs like iShares Russell 2000 (IWM) may see better performance if the Federal Reserve cuts interest rates.
June 20, 2024 | 8:38 am
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NEGATIVE IMPACT
Thomas Hayes expects Microsoft to underperform in the second half of the year as the market shifts focus to small-cap stocks and other sectors.
Hayes anticipates a market shift away from tech giants like Microsoft towards small-cap stocks and other sectors, leading to potential underperformance for MSFT.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 70
NEGATIVE IMPACT
Thomas Hayes from Great Hill Capital has expressed caution regarding Nvidia's short-term performance, citing high earnings multiples and potential challenges in maintaining high gross margins.
Hayes believes Nvidia's current high valuation and reliance on maintaining high gross margins may not be sustainable, leading to potential underperformance in the short term.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
NEUTRAL IMPACT
The Invesco QQQ Trust, which tracks the Nasdaq 100 Index, is trading at a record high but may see slower performance as the market shifts focus.
While QQQ is currently performing well, the anticipated market shift away from tech giants could lead to slower performance in the short term.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
The iShares Russell 2000 ETF, which tracks small-cap stocks, may see better performance in the second half of the year if the Federal Reserve cuts interest rates.
Hayes expects small-cap stocks to outperform if the Federal Reserve cuts interest rates, which would benefit ETFs like IWM.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 60