Trader calls stocks dangerous in earnings report

It’s Nvidia’s moment of truth.

The semiconductor company is expected to release its results Wednesday afternoon. It comes after the stock has risen over 100% this year and, as the ETF’s third weighting on SMH semiconductors, its next move could impact the entire trading space. chip makers.

Investors Wannabe Nvidia should be careful after his massive run, warns Joule Financial chairman Quint Tatro.

“Nvidia is the definition of when ‘momo’ meets FOMO,” Tatro told CNBC’s “Trading Nation” on Tuesday, referring to its high-speed rally and traders cramming into the stock to chase gains.

Tatro says his fundamentals have become too broad – for example, the stock trades at 54 times futures earnings and 19 times futures sales. The SMH ETF trades at 22 times forward earnings and six times forward sales.

“Now you don’t try to be cute and run this stock, you will be crushed, but the reality is if you buy this stock here, I mean it’s very, very dangerous. company, amazing track record. You put it on your list and when the market ends up correcting itself like it will at some point in time then you step in and buy stocks. But I don’t think you are chasing that name, especially in terms of of profits here, ”Tatro said.

In the same Trading Nation interview, Ascent Wealth Partners CEO Todd Gordon said Nvidia still has room to operate for the long term.

“That’s a huge stock of momentum. They are a leader in AI, data centers, machine learning, self-driving cars, the cloud, games,” Gordon said. “You’re right, 50 times expected earnings, but they are well positioned in two high growth segments: games and data center cloud. “

Gordon says the games should benefit from an upgrade cycle tied to upcoming console launches from Sony and Microsoft. Data center and cloud revenues are also expected to continue to benefit from the telecommuting trend.

Disclosure: Gordon owns Nvidia.


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