One Stock Recommendation to Buy and One to Sell This Week: Nvidia, Nike
Last week saw U.S. stocks make a significant recovery after experiencing severe losses due to President Donald Trump’s trade war escalation causing recession fears and impacting risk sentiment.
Despite this rebound, both the S&P 500 and the Nasdaq Composite registered their fourth straight week of losses. The S&P 500 dropped by 2.3%, while the Nasdaq, heavily influenced by technology stocks, fell by 2.4%. The Dow Jones Industrial Average also suffered its worst week in two years, struggling with a 3.1% decline.
This upcoming week is anticipated to be eventful and will include key market-moving occurrences like the Federal Reserve’s latest monetary policy meeting. Although it is expected that interest rates will remain steady, Chairman Jerome Powell’s post-meeting press conference could provide insight into potential rate cuts. Additionally, the Fed will release new projections for interest rates, unemployment, and inflation through its dot-plot quarterly projections.
The economic calendar will also feature the U.S. retail sales report on Monday, which will shed light on the country’s economic health. In terms of earnings, significant results are expected from companies such as Nike, FedEx, Micron Technology, Lennar, General Mills, and Carnival. Furthermore, some Chinese companies like PDD Holdings, Tencent, XPeng, and Nio will also release their corporate reports.
Amidst market fluctuations, one notable stock to consider is Nvidia. The company’s GPU Technology Conference (GTC) is set to showcase their latest advancements in various fields, positioning it as a stock to potentially invest in. Historically, Nvidia’s GTC has positively impacted the company’s stock performance, often surpassing the Philadelphia Semiconductor Index in the week surrounding the conference.
Nvidia’s GTC will feature over 1,000 sessions, 2,000 speakers, and nearly 400 exhibitors, with CEO Jensen Huang delivering a keynote speech. Analysts are optimistic about Nvidia unveiling its GB300 AI chip and providing more details on its upcoming next-gen GPU. Despite recent price declines, most analysts maintain a bullish outlook on Nvidia, forecasting a potential 41.8% upside with a mean target price of $172.50.
On the other hand, Nike is gearing up to release its earnings report for the fiscal third quarter, expected to show a considerable decline in adjusted earnings per share and revenue. The sportswear giant has been facing challenges like falling sales in North America, weak demand in China, and increased competition from other brands. Although Nike is undergoing a strategic reset under its new CEO, Elliot Hill, investor sentiment remains bearish with no upward revisions in the lead-up to the earnings report.
Nike’s financial health rating is currently rated as “FAIR” due to concerns about fluctuating sales growth and declining gross profit margins. With the stock price down 5.3% year-to-date, it is crucial for investors to stay informed and consider their investment decisions carefully in light of these market trends and developments.
