In This Article:
As Nvidia (NVDA) makes headlines, Clockwise Capital chief investment officer James Cakmak joins Seana Smith and Brad Smith on Morning Brief to discuss his concerns with the artificial intelligence (AI) chipmaker's stock and other options for the AI trade.
"There is a lot of risk — you can't sugarcoat it — but the good news is that expectations have come down significantly over the last two weeks or so," Cakmak says about Nvidia's current valuation, adding, "The setup, we think, is incrementally starting to skew a little bit positive but not positive enough where you want to bet the farm on it."
The strategist highlights Taiwan Semiconductor Manufacturer (TSM) and ASML (ASML), saying these names have been more appealing investment opportunities because "the demand is sufficiently there while you have a lower bar in terms of expectations."
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
This post was written by Naomi Buchanan.
Pre-market move higher here. Year to date stocks down 8% though, is this a buy signal?
Uh no, not not until we get the numbers. I mean, from our standpoint, you know, we were um we were trimming the stock in the 140s. Right now it's about 8% of the benchmark, you know, we're about half of that as it stands right now. Um um there is a there is a lot of risk. Um, you know, you can't sugarcoat it. Um but the good news is that um expectations have come down significantly uh over the last two weeks or so. Um, so, you know, the setup, uh you know, we think is incrementally starting to skew a little bit positive, but not positive enough where you want to um uh, you know, you want to bet the farm on it.
When expectations get lowered for Nvidia, what type of warning sign or red flag is that even for the rest of the semiconductor landscape?
Yeah, it's a warning sign for sure. But but the the good news is that we have um a lot of the uh the customers of Nvidia coming out with very high guidance under ca on the capex side, you know, from uh Microsoft, Amazon, Meta, you know, they all upped uh their um capex guidance numbers for 2025. And um so the spend is still certainly there. In our view, you know, that spend could uh come down over the course of the year, lower than the bars that they had set, which is why, you know, you have you got to be careful with the chip makers. You know, we we personally at Clockwise are are uh increasingly putting our um assets into names like TSM, uh ASML uh over a name like Nvidia uh because we think that the demand is sufficiently there while you have a lower uh bar in terms of expectations.