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Has anyone else noticed that in video for the past week really has been selling off while the rest of the other semi stocks are pushing up higher some like never before. What's going on guys? It's Ricky and this was a question and conversation that I wanted to have with you guys. Is anyone else paying attention to this?
It's not that we found a secret pocket or anything like that. It's literally just entertaining the conversation of well, why is this happening? Why is it that we have you know, the most valuable company that's publicly traded the market leader in the semiconductor space in the whole AI space, right?
Nvidia since hitting highs of 219 why all of a sudden has it sold off over 10% in the past 7 days 7 to 8 days while the rest of the semi companies like AMD today up 14% after market hours hitting new all-time highs $410 per share as of right now. Who knows how much higher it can push tomorrow? But it's not just AMD, right?
AMD has had an amazing not just past week but past month. It's up now at this point. I don't even know how much it's up. It was up 80% before it reported earnings when it was trading at right below $200 per share. Now it's up yeah, 210%. But another very popular stock recently has been SanDisk. SanDisk is up 4.6% past week unstoppable.
What's one of the other ones? Intel. Intel has traded in an incredibly bullish way. Past week bullish. It's not like it's a super cheap stock. So what gives? Now the reason I'm making this video is also overall markets are pushing higher. It's not just that it's just the semi sector, it's overall markets are pushing higher.
So, the overall environment for some of the most valuable companies to also be trading at elevated levels would make sense. But now seeing that markets as a whole are pushing higher, but there's a disconnect because now Nvidia is actually recently pulling on back. What's going on? This is what I found to be interesting, right?
So, I asked a lot of you guys might know, Warren AI is like a chat GPT that's more tailored for investors or traders. It's from Investing Pro. I asked it like, why is Nvidia selling off while the rest of the semi stocks are pushing higher? It tried to give some technical reasons on why, but this is the biggest thing that stood out to me.
The core reason, rotating and crowding, which I think is really important for investors or beginner investors and traders to understand. It's not that again, it's an aha moment, it's just important to acknowledge what is going on. Investors are rotating out of the most crowded AI winner, obviously Nvidia, into laggard or peers with catch-up potential, especially those posting fresh bullish technicals or earning upgrades.
Micron, AVGO, MRVL, LRCX. But on top of that, you have SanDisk and Intel and AMD some of the top performing in the current sector space. Also, don't get it although they're kind of but kind of not, they're kind of in the same sector, Super Micro, right? Also up nearly 20% after market hours. Profit taking.
With Nvidia up massively since 2023 and now trading at 40x trailing PE ratio, but only 24x forward, some are locking in profits, right? Especially after hitting record highs just days ago. Makes sense. Short-term technicals. Nvidia's momentum is negative. Most peers are in overbought territory, but still attracting momentum traders.
So, this is what I found to be really interesting is that Nvidia is selling off due to short-term technical weakness, profit-taking after a massive run, and a rotation into other semi names that are just hitting their stride. The long-term AI story remains the same and intact, which I think is really important to acknowledge.
But, in the near term, Nvidia is simply the victim of its own prior outperformance and an increasingly crowded trade. I found that to be so interesting, but also so well said, because I feel like it really does give us an inside look of like where not retail traders necessarily like you and I, but institutions, right?
Big funds or investors that have been invested in Nvidia for a really long time. This has been the most crowded and most maybe valued AI company. And now that it's hit new record highs, now they're looking for the ones that are simply trying to catch up. I thought that was a great way in putting it, because when you think about all of these different AI companies, what are their gains or their growth always being compared to or what they're going to catch up to?
It's always Nvidia. Nvidia is still the unicorn. Nvidia as a company, and let's not get it twisted, prints money more than any of these other companies that are up 30% in the past 3 days, right? Even in comparison to AMD, uh Nvidia as of right now, currently offers still 20% upside. Its P ratio is right below 40, but it makes a net income of 120 billion in net income a year.
Even comparing it to one of the bigger competitors, 4.3 billion. And again, it's expected to grow, right? That's That's why AMD is reporting um the way that it is is because of its growth expectation and also uh its guidance of what it just released. It is growing at a faster rate than what was previously factored in.
But you would assume so after it ran up 80% in 30 days for no reason, right? I think that this is really where we are beginning to see institutions are moving away from these potentially crowded AI companies such as maybe Nvidia for a short period of time as they've been squeezed and they are possibly too overbought to push any higher and now they're moving their funds to AI competitors that can likely catch up, that already have some form of bullish indicators, right?
AMD, Intel, SanDisk and even today SMCI. I hate to even say SMCI in the same space of Nvidia, but nonetheless, we have to talk about it because it's up 17%. But I I really wanted Oh, and I don't know how I overlooked it. Micron, right? MU. Micron Technologies. All of these have been so incredibly bullish and we're like, what the heck is going on?
I think it's important to acknowledge kind of like the bigger picture. Right now, it seems like a lot of them are just trying to catch up to put the to the potential hype that Nvidia once had and a lot of that money is being poured in to those specific companies because if you pay attention to Nvidia, and not just Nvidia, but we also see money being poured out of Meta and is it Microsoft that I also saw sell off a little bit as well?
All the Mac 7 comp Not all. Some of the Mac 7 companies seem to be lagging behind while the rest of the market pushes higher. I know Google is still performing quite well and I know Amazon performed quite well today as well. But when it comes down to the other three, they are falling a little bit behind.
Maybe it's just me, but I I thought that that take was something worth talking about because I think it does provide some light in why markets are favoring the semi stocks that are performing good or better than what was expected, but they're pushing them to a level that in my opinion just seems unsustainable.
You know, pushing Nvidia to all-time highs and even with its crazy valuation, it's a money-printing machine. SanDisk, Intel, Super Micro, those are not money-printing machines. At least not in comparison to Nvidia. So, in the short-term, it seems like money might be moving out from these big Mag 7 companies, but we all know that again, that's only supported during irrational times.
When markets begin to correct and those overvalued stocks begin to sell off, where are they going to put it? It's always a safer bet to place it into the one some of the Mag 7 companies, not all of them because we got Tesla in there. But again, I thought that that was an interesting thing to kind of just talk about and cover, especially as the market is so hyper fixated and driving prices higher for a lot of these semi companies.
You guys let me know down in the comment section what you think. Also, if you have any interesting articles that you would like me to read to learn more about why you think I should be bullish on any of these companies even after being incredibly overbought. Again, I'm always open to learning more. Just feel free to comment down below.
So again, hope to see you for tomorrow's live trading session. Whenever you're ready to tune on in, it's going to be the second link in the description down below, and we'll see you at market open. Take care, team.
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