Market Maven Speaks: During a recent episode of PreMarket Prep, co-host and seasoned trader Dennis Dick lauded NVIDIA Corp (NVDA) as a standout performer amidst market turmoil.
In the wake of a sizzling inflation report and a general tech sell-off, Dick’s endorsement of NVIDIA stood out.
Insider Insights: Dick highlighted NVIDIA’s resilience, attributing it to the company’s size and prominence in the semiconductor industry. During market turbulence, investors often seek refuge in stalwarts like NVIDIA, dubbing it a ‘flight to safety.’
In Dick’s Words: “As much as it looked like the breakout was happening seven or eight days ago for small-cap stocks, that breakout is now officially a fakeout,” Dick remarked. “We are down significantly from where we were… don’t be surprised if stocks like Nvidia are actually the ones that get bought because people were like I’m selling all of my Nvidia today because this number’s hot.”
Dick underlined NVIDIA’s robust position, suggesting that even in a scenario where the Federal Reserve refrains from rate cuts, NVIDIA is well-equipped to weather economic storms owing to increasing product demand and its scale.
In contrast, semiconductor peers like Advanced Micro Devices (AMD) took a hit post higher-than-expected inflation data for March, diverging further from NVIDIA.
“Nvidia works if we don’t get any interest rate cuts,” Dick opined. “That’s why I think a stock like Nvidia is the kind of stock that I would be actually buying today and maybe staying away from all of the interest-rate sensitive stocks.”
Market Moves: While NVIDIA, akin to most tech stocks, began Wednesdays’ trading session on a downturn, it swiftly transformed as predicted by Dick. Traders gravitated towards the stock for safety, propelling it up by 4% during the day. At the time of this analysis, NVIDIA was surging by around 1.5%, contrasting the SPDR S&P 500 Trust ETF’s (SPY) drop of about 1%.