Investor optimism has clearly improved in the wake of Nvidia’s () spectacular results and guidance. Nvidia posted a 4.4% revenue surprise and a 6.2% earnings surprise. What was even more exciting than its revenue and earnings beat, though, was Nvidia’s outlook for fiscal year 2028. The company expects 70% annual revenue growth, which was well above analyst estimates of 45% annual revenue growth. CEO Jensen Huang noted that 2028 revenue would accelerate even faster if there wasn’t a memory chip shortage. This comment then triggered a big rally in memory stocks and helped to re-ignite a big rally in AI-related stocks.
It will be interesting how investors will react to Micron Technology’s () earnings announcement, which should be an incredible encore in subsequent weeks. Also helping to boost investor confidence is that the financial media is excited about their annual trip to Jackson Hole this week for the annual Kansas City Fed Conference.
If we have learned anything in the past few months is that fundamentally superior stocks bounce right back, especially in the wake of better-than-expected sales, earnings, higher guidance, and rising order backlogs. As Americans, we have to decide if we want to be manipulated by negative news and miss great investing opportunities or if we want to share in the success of many billionaires, like Jensen Huang (Nvidia), Sundar Pichai (Google) and Alex Karp (Palantir Technology).
In conclusion, we should keep our heads down and not be distracted by any of the naysayers or market manipulators. Good stocks bounce and fundamentals cannot be ignored for very long. I have had some clients question my massive holding in Nvidia, and I politely told them that there are no better stocks to go into, especially after incurring the tax consequences of selling a stock with a massive capital gain.
So, I want investors to feel good about America, grow and prosper by investing with successful billionaires, plus enjoy an incredible earnings environment as well as explosive growth.