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One of the hottest trades on Wall Street suddenly went cold last week.
Semiconductor giant Broadcom Company (Afgo) announced earnings after the bell last Wednesday.
The company recorded 48% year-over-year revenue growth and 54% year-over-year profit growth. Both were a slight surprise.
But investors were not satisfied after the company maintained its previous forecast for semiconductor revenues of $100 billion. This sent Broadcom shares down more than 25% on Thursday and Friday.
Since Broadcom is one of the leaders in the AI revolution, it dragged the entire Nasdaq down with it. As a result, the tech-heavy index finished down nearly 5% during the week.
At first glance, this might seem like alarm bells are ringing about an AI boom. After all, chipmakers have been among the biggest drivers of the market’s rise over the past year.
So the question is: What is actually rewarding Wall Street right now?
In my view there is nothing wrong with the market. It’s just that after a long period of gains, the market has to take a break from time to time.
Therefore, money does not leave the market. It has just adjusted into areas that may offer greater upside from here. It now rewards small AI companies.
In this week’s Navellier Market Buzz, I explained why investors are turning away from some of the biggest AI winners and moving to a new group of AI infrastructure stocks that are benefiting from the massive buildout of data centers.
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What if you could see the transformation before anyone else?
Personally, I think the pullback was a massive overreaction to Broadcom’s outlook and I see the pullback as a good buying opportunity.
So, a pullback in a stock like Broadcom doesn’t change my long-term outlook on AI.
In fact, I believe some of the biggest opportunities in AI are still ahead of us.
But as we’ve seen over the past week, investor sentiment can change quickly. The stocks that led yesterday’s gains are not always the ones that lead tomorrow’s gains.
When such shifts occur, it’s always helpful to have a signal – a way to cut through the noise and determine where money might flow next.
Before it becomes clear to everyone.
Which is exactly why I’m moving forward with this Wednesday, June 10 at 10 a.m. ESTwith my colleague and friend, Keith Kaplan, to unveil what I believe could be the most significant upgrade to my Stock Grader system in decades.
Based on our extensive backtesting, this upgrade would have dramatically improved results over many of my previous recommendations.
For example…
- He could have actually made a 26% gain. Generac Holding Company (GNRC) to a profit of 1,178%…
- 130% profit Regeneron Pharmaceuticals Company (rain) to gains of 241%…
- It consolidated gains of only 7% Najjar Technology Company (CRS) to an incredible 416% winner.
During this special event, I’ll show you exactly how this system works and explain why I believe it can become an essential tool for navigating today’s fast-moving market.
Additionally, if you join us, I will be giving up two stocks that this system indicates – one to buy and one to sell.
Click here to reserve your place now.
sincerely,
Louis Navellier
editor, Market 360
The Editor hereby discloses that as of the date of this email, the Editor owns, directly or indirectly, the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations contained in the article described below, or otherwise mentioned:
