Weekly Update: Nvidia is Worth How Much?
Good evening, and welcome to this week’s edition of Stealth Trades!
The chart almost speaks for itself.
1,153% in a year and a half.
Nvidia’s value has soared from $279 billion in October 2022 to a mind-boggling $3 trillion today.
It took Apple 37 years to become the world’s first trillion-dollar company in 2018.
Nvidia just added a trillion dollars to its market cap in 37 days.
The numbers are hard to even wrap your mind around. As of this writing, Nvidia is now larger than:
- 5x the market cap of Tesla
- 6x the market cap of Walmart
- The entire crypto market COMBINED
- Canada’s GDP plus $1.2 trillion in cash
- GDP of every country in the world except 7
- Amazon and Berkshire Hathaway COMBINED
- The market cap of the entire French stock market
- Collective net worth of the 12 richest people in the world
We used to have a saying at a brokerage company I worked at – when you start taking screenshots of the trade, it’s time to sell.
NVDA could go higher. I will be the first to admit I did not see it going this far. But at this elevation, the stock feels like it has further to fall than fly.
After gapping up to new all-time highs Thursday morning, shares fell 6.5% from opening bell to close.
And as of noon, it is down another 3.3% today.
I have spoken a lot this year about Nvidia being the clear market leader. So, it is no surprise to see the indexes stall in response.
One stock, however, is up on the day…
In last week’s edition, I recommended NuScale Power (SMR) – a company that builds nuclear reactors to power AI data centers. I also sent out a video Monday morning breaking down the trade.
SMR is up 17% this week. It was up even more before NVDA began pulling back on Thursday.
Hopefully you made some money on this one. If so… well done.
As a general rule of thumb, I like to sell some of the position once it gets up over 20%.
In a slower-moving stock like AAPL or WMT, I usually sell half to two-thirds of the position. But with a fast-moving name like SMR that hit the 20% target in 3 days, I only want to sell a quarter of my position and let the rest run.
Everyone is different. How you manage the trade is up to you. But I like to nail down profits when they’re on the board.
Another fast-moving stock I’m looking at is Costamare (CMRE).
Not to be mistaken with Costa del Mar, the sunglasses manufacturer, Costamare is a marine shipping company.
The shipping sector has been a top-performing group for the last several months.
The only area that rivals shipping’s performance is the semiconductor sector which is heavily weighted with NVDA stock.
But unlike NVDA, which went down Thursday and Friday, CMRE went up. The stock gained 8.5% while the broader market pulled back.
This kind of performance divergence is something I love to see – stocks capable of advancing when the rest of the market is pulling back.
Costamare has a relative strength rating of 98. In other words, it is outperforming 98% of all stocks in the market. It is in the top 2%.
I have added the relative strength line to a daily chart of CMRE below.
Notice how it is pointing straight up.
Note also the volume candles across the bottom of the chart. CMRE is surging on consecutive days of above-average buying volume. That’s exactly what we want to see – pullbacks on light volume and surges on higher.
While it can sometimes be risky buying stocks that are extended, CMRE just went through a correction. It pulled back 10% in the first two weeks of June.
This, at least to me, looks like profit-taking. And with that out of the way, the stock is now free to resume its trend higher.
Let’s see what happens next week.
Best wishes for your trading,
