When Will the Rest of the Market Participate?

Andrew Giovinazzi

Yo Pit Crazies,

Nvidia Corp (Ticker: NVDA) had one of those earnings days that saturated social media with huge life changing wins. I for sure think AI is a seachange in how things get done going forward but it is early and the market has decided NVDA will be a part of it.

Somehow Intel Corp (Ticker: INTC) missed the high speed computer boat that has been going on for 20 years. International Business Machines Corp (Ticker: IBM) has been promoting Watson on the Superbowl for several years, but again, it’s somehow missing the boat.

NVDA chart compared with IBM and INTC

There’s the rub, as these are two different kinds of stocks.

And as such they should be traded differently.

Two Types of Trades: Income and Capital Gains

IBM and INTC are income stocks. The heady days of growth seem behind them. That could change, but mostly big companies buy innovation. INTC bought Mobileye Inc (Ticker: MBLY) for autonomous cars a couple of years ago and spun it out. Besides the short term financial gain, INTC chip business has been sagging, as the market pivots to the GPU’s built by Advanced Micro Devices Inc (Ticker: AMD) and NVDA.

NVDA is a growth trade at a crazy price, and INTC and IBM are income trades at a cheap price. You should learn how to tell and trade the difference.

As for today, the dopes in Washington DC seem to be the only ones who want to spend as much as they do – a CNN poll shows 60% of Americans want a deal with less spending. Stocks, except AI stocks, are stuck until that gets done. More on that this weekend.