Here's Why These 4 Portfolio Stocks Are Outperforming the Market
There's a reason these names are outpacing the overall market.
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* Nvidia CEO Jensen Huang calls Blackwell's demand “insane.”
* Truist joins our thinking and ups its target on The Trade Desk.
* Waste Management gets an Outperform rating from William Blair.
As the market muddles through this morning’s economic data and its implications, you may have noticed that several of TheStreet Pro Portfolio holdings are outpacing the market. One of those is Lockheed Martin LMT, which is not a surprise to us considering our price target increase (If you missed the why behind our move, you can find that here.)
Other holdings moving higher include Nvidia NVDA, Marvell Technology MRVL, The Trade Desk TTD and Waste Management WM. Let’s dig into why that’s happening with these names.
Nvidia CEO Jensen Huang Calls Blackwell's Demand 'Insane'
In an interview late yesterday, Nvidia CEO Jensen Huang said that demand for the company’s next-gen AI Blackwell chip is “insane.” That comment and the inferred robust demand from the likes of OpenAI, Microsoft MSFT, Meta META, and others is the latest comment supporting ramping AI demand expectations. We’ve been tracking comments like these as well as those for AI adoption, and we're keeping our One ratings on Nvidia, Marvell, and Qualcomm QCOM.
During the interview, Huang also shared that Nvidia plans to update its AI platform each year with the intention of increasing performance by two to three times. With Blackwell expected to cost between $30,000-$40,000 per unit, that should allow Nvidia to continue fetching a pretty hefty price tag for its AI solutions. Blackwell unit shipments are expected to start this quarter and ramp in the following ones, bringing with it a nice step up in Nvidia’s revenue. As Blackwell production ramps, we should see margins improve as Nvidia moves down the production curve.
These latest comments support the overall AI demand chip picture, which will benefit Marvell’s revenue stream. When it comes to Huang's comment about future performance, our thinking is that Marvell’s proprietary AI chip efforts with Microsoft, Meta, Alphabet GOOGL, and Amazon AMZN will continue to be a hotbed of activity for the company. Our view is that AI adoption will pressure network capacity, fostering capital spending to add capacity, with Marvell benefiting.
The next set of known catalysts we’re watching for as it relates to NVDA and MRVL shares, as well as those for QCOM, Universal Display OLED, and Apple AAPL will be September revenue and September quarterly results from Taiwan Semiconductor TSM and Hon Hai/Foxconn. Other data points to come will be updated capital spending comments from Meta, Amazon, Microsoft, and Alphabet. We’ll also be interested in what Advanced Micro Devices AMD says at next week’s “Advancing AI” event on October 10.
Truist Joins Our Thinking and Ups Its Trade Desk Target
In a note published Thursday, Truist raised its price target on Trade Desk to $120 from $108. “Solid” 3Q 2024 results" is one of the cited reasons for the move as is “sustained momentum” across connected TV applications.
Trust also echoes our view that a heated 2024 election cycle and close polling could drive stronger-than-expected political ad spending, with Trade Desk reaping the benefit.
Waste Management Gets an Outperform Rating
William Blair initiated coverage on a handful of waste companies, including an Outperform rating on Waste Management. The firm shares our view that increasing use of automation for Waste’s residential business should drive continued margin improvement and pricing should remain favorable.
Our WM price target remains $220, but subject to what management says about the pending Stericyle acquisition when it reports on October 29, we’re open to revisiting that target.
At the time of publication, TheStreet Pro Portfolio was long LMT, NVDA, MSFT, NVDA, META, MRVL, QCOM, TTD, AMZN, AAPL, GOOGL and WM.
