00:00 Speaker A
It’s time now for today’s strategy session, watching Nvidia ahead of earnings on Wednesday. Take a look at this chart. It shows the median return on the stock depending on how long you hold it before the earnings report. Buying the stock just one day prior has a median return of 2.3%. Joining us now on this, Nancy Tengler, Laffer Tengler Investments CEO and CIO. Nancy, always great to chat. How are you thinking about Nvidia ahead of its earnings report? Have you changed any of your positioning at all?
00:40 Nancy Tengler
Well, Madison, thanks so much to have, for having me, and happy Memorial Day weekend. Um, yeah, I, we added to the stock during the tariff turmoil. And so we picked it off at a pretty nice level and after dollar cost averaged our positions in. Um, but I still think you want to own this stock for the very long term. Uh, this is a company that’s central to, to the AI revolution obviously. And what we’ve learned from the deep sea, deep fake, as I call it, is that, um, the, the hyper scalers in the US, US companies are doubling down on CAPEX and they are still investing at a really rapid clip. And so this is a name that I think you want to own and take advantage of if they do disappoint on margins and the market isn’t expecting that, which is what we expect.
02:02 Speaker A
What do you need to hear from Nvidia to clearly signal that the demand profile that they’ve continued to express to the street in quarters past is still there, and not just still there, but has even more room for growth even with some of the international implications that investors have had to factor in?
02:30 Nancy Tengler
Yeah, so, so Brad, I mean, I think that Jensen Huang announcing that they’re opening up their platform is a head nod to, to the capacity constraint that we’re hearing about from Microsoft and Amazon and, and that is we could have grown faster, uh, but for the fact that we couldn’t get chips and there were, and, and there’s an infrastructure, uh, issue. So I, I think we will, what I’d like to hear is that the company continues to innovate and they continue to, continue to adapt to, to the, the constraints, I’ll say, that we’re getting out of the administration. So we expect in the second half, you will see the new, the newly redesigned China chip adding to, to growth. And so I, I expect to hear a little bit about that. And then because costs, input costs are up, I’d like to hear something about, okay, if margins are in fact down, are they compressing overall or are they just, is this a short-term blip?