This leader in artificial intelligence may be poised to lead a rebound in tech stocks.Following the stock market's record-breaking run last year, the start of 2025 offers a timely reminder that risk and price volatility are normal parts of the investing process.Indeed, the Nasdaq Composite (^IXIC 0.91%) has hit correction territory. It's down about 14% from its all-time high (as of this writing) amid renewed concerns over the strength of the economy. One stock that has been caught up in the turbulence is te ...

Market Overview - The Nasdaq Composite Index experienced a 4% drop on March 10, marking the worst one-day decline since fall 2022, which may be alarming for newer investors [1] Company Analysis: AMD - AMD has transformed into a diversified semiconductor company, designing chips for various applications including data centers and gaming systems [3] - Despite trailing behind Nvidia in the AI accelerator market and struggling in the gaming segment, AMD's financials are improving, with 80% of its business growing rapidly [4][6] - In Q4 2024, AMD reported revenue of $7.7 billion, a 24% year-over-year increase, with the data center segment experiencing a 69% revenue increase [5] - The client segment, which produces PC chips, accounted for about 30% of revenue and saw a 58% rise [5] - AMD's trailing P/E ratio is around 98, but the forward P/E ratio is about 21, indicating potential for recovery as the market recognizes AMD as a growth stock [7] Company Analysis: Roku - Roku's recovery story may seem less convincing compared to AMD, with the stock down 86% from its 2021 peak, raising concerns about profitability [8] - The shift from traditional TV to streaming continues to benefit Roku, which derives most of its revenue from advertising [9] - Roku's platform engagement is improving, with 90 million households on the platform, a 12% increase from last year, and streaming hours rising 18% [10] - In Q4 2024, Roku's revenue rose 22% year-over-year to $1.2 billion, with average revenue per user (ARPU) increasing by 4% to $41.92 [12] - Roku currently has no P/E ratio due to elusive profitability but trades at a low price-to-sales (P/S) ratio of 2.5, suggesting potential for stock recovery as ARPU growth continues [13]

The artificial intelligence (AI) chip giant's stock is trading at an attractive valuation.Nvidia (NVDA 5.20%) stock has been a fantastic medium- and long-term winner and even a winner over the last year. But shares of the artificial intelligence (AI) chip and technology leader have been having a tough time recently. Nvidia stock closed at $108.76 on Tuesday, March 11, which represents a decline of 19% in 2025 and a drop of 27.2% from its all-time closing high of $149.43, reached on Jan. 6 of this year.For c ...

Nasdaq Sell-Off - The Nasdaq has entered correction territory, dropping over 10% from its December peak [1][2] - Concerns about an imminent recession, ongoing tariff wars, and potential government shutdowns have contributed to the decline [2] Company Analysis: Alphabet - Alphabet's Google Cloud segment has seen a significant increase in revenues and operating income, indicating a shift towards profitability [3][4] - The company plans to invest $75 billion in building data centers this year, up from $52.5 billion last year, to capitalize on AI growth opportunities [4] - The Google Services segment also reported double-digit revenue growth, with an expected earnings growth rate of 10.7% for the current year [5] Company Analysis: Amazon - Amazon Web Services (AWS) has become a profitable unit, with a 19% revenue increase last quarter, making it the fastest-growing segment [6][7] - The company has invested over $100 billion in AI infrastructure and developed its own AI chip to reduce costs [7] - Amazon's expected earnings growth rate for the current year is 14.3% [7] Company Analysis: NVIDIA - NVIDIA maintains a competitive edge in the GPU market, with high demand for its CUDA software platform [8] - The new Blackwell chips have experienced strong demand, and the company is well-positioned to support AI growth [9][10] - NVIDIA's estimated earnings growth rate for the current year is 46.8% [10]

Core Viewpoint - The Nasdaq Composite has entered correction territory, defined as a decline of at least 10% from a recent high, raising investor concerns about potential trade wars and economic recession [1] Market Behavior - Market corrections are normal, and the uncertainty surrounding tariffs may not last, suggesting that panic selling is not advisable [2] - Timing the market is nearly impossible, making it difficult for investors to enter and exit at optimal times [2] Bear Market Insights - Bear markets, defined as a decline of 20% or more, tend to be shorter than bull markets, averaging less than 10 months in duration [3] - Historically, during the first month of a new bull market, stocks have risen by an average of nearly 14%, with returns exceeding 25% in the first three months [3] Historical Context - The bear market following the 1987 crash lasted only three months, while the COVID bear market lasted just over a month [4] Investment Strategy - Investors are encouraged to view market downturns as buying opportunities and to consider a dollar-cost averaging strategy, investing a fixed dollar amount at regular intervals regardless of market conditions [6][7] - Utilizing an exchange-traded fund (ETF) like the Invesco Nasdaq 100 ETF is recommended over picking individual stocks during this strategy [8] ETF Overview - The Invesco Nasdaq 100 ETF consists of the 100 largest non-financial stocks on the Nasdaq, with approximately 60% of its index comprised of technology stocks [9] - The ETF's top holdings include major companies such as Apple, Microsoft, and Nvidia, with respective weightings of 9.7%, 7.9%, and 7.4% [10] Performance Metrics - The Invesco ETF has shown a cumulative return of over 407% over the past 10 years, significantly outperforming the S&P 500, which gained 239% during the same period [11] - The ETF has outperformed the S&P 500 87% of the time based on rolling monthly returns as of the end of 2024 [11] Conclusion - Current market conditions present a favorable opportunity for dollar-cost averaging into the Invesco Nasdaq 100 ETF to establish an attractive cost basis in anticipation of a market rebound [12]

Core Viewpoint - The current market environment presents challenges for investors, with the Nasdaq Composite index down approximately 13% from its all-time high, while PepsiCo has shown resilience and growth potential, making it an attractive investment opportunity [1][2]. Company Overview - PepsiCo has demonstrated steady growth through its ability to adapt to changing consumer preferences, distinguishing itself from tech sector giants [3]. - The company has a diverse portfolio of brands, including Lay's, Doritos, and Gatorade, sold in over 200 countries, contributing to its long history of growth [4]. Financial Performance - For the year ended December 31, PepsiCo achieved a 2% year-over-year increase in organic revenue despite flat beverage volumes, driven by successful pricing initiatives and growth in Europe and Latin America [5]. - Core earnings per share (EPS) reached a record $8.16 for 2024, reflecting a 9% increase from 2023, with expectations for continued growth in 2025 [6]. Investment Appeal - PepsiCo's stock is currently trading at around 19 times its consensus 2025 EPS, significantly below its five-year average multiple of 26, indicating potential undervaluation [9]. - The company offers a 3.5% dividend yield, with a history of increasing its annual payout for 53 consecutive years, classifying it as a Dividend King [10]. Long-term Outlook - PepsiCo is well-positioned to navigate market volatility, benefiting from its strong fundamentals and international presence, making it a suitable addition to a diversified portfolio [7][8]. - The stock's combination of attractive valuation and long-term growth potential positions it favorably for rewarding shareholders in the future [11].

Core Viewpoint - The Nasdaq Composite has entered correction territory, falling over 10% from its mid-December high, creating attractive entry points for quality stocks [1] Group 1: Meta Platforms - Meta Platforms is the second-largest digital advertising platform globally and is gaining market share, primarily through its platforms like Facebook and Instagram [4] - The company reported a revenue growth of 21% last quarter, with ad impressions increasing by 6% and average price per ad rising by 14% [5] - Meta's new social media platform, Threads, has reached 320 million monthly active users and is growing by approximately 1 million users daily, presenting a significant future monetization opportunity [6][7] - Meta's global average revenue per user (ARPU) stands at $14.25, significantly higher than competitors like Snap ($3.44) and Pinterest ($2.12) [7] Group 2: Alphabet - Alphabet's Google search engine remains the largest digital media advertising platform, with YouTube being the fourth largest [8] - The company is leveraging AI through its Gemini model to enhance search results and create new ad formats, which could provide additional monetization opportunities [9] - Alphabet is investing in its cloud computing business, which is currently capacity constrained, to meet growing demand [11] - The company is making strides in quantum computing with its Willow chip and is leading in the robotaxi space with its Waymo business, which is expanding both domestically and internationally [12] Group 3: Investment Opportunity - Both Meta and Alphabet have seen their stock prices decline by about 20% from recent highs, making them attractive long-term investment opportunities due to their strong market positions and growth potential [13]

Group 1: Honeywell International - Honeywell plans to split into three publicly traded businesses, which may outperform as individual entities based on successful examples from peers [2][7] - The focus is on Honeywell Aerospace and Honeywell Automation, with management citing peers like GE Aerospace, RTX, and TransDigm, all of which have undergone significant corporate changes [3][5] - Honeywell Aerospace will gain flexibility for acquisitions to enhance its portfolio, while Honeywell Automation will focus on industrial and building automation, competing with companies like Emerson Electric and Rockwell Automation [4][5] Group 2: Hexcel Corporation - Hexcel specializes in advanced graphite composites, which are increasingly used in the aerospace industry, providing long-term growth prospects due to rising airplane production and composite content [9][10] - Despite recent challenges from Boeing and Airbus falling behind production schedules, Hexcel's valuation has declined, allowing investors to buy at 19 times its estimated 2025 free cash flow, which is favorable given its growth potential [11][12]

Core Viewpoint - The current market environment, particularly the Nasdaq Composite's drop of over 10%, has heightened investor fear, prompting a search for safer investment options [1]. Group 1: PepsiCo - PepsiCo is a major player in consumer staples, particularly in salty snacks and beverages, but has faced poor stock performance recently [3]. - For 2024, PepsiCo's organic revenue is projected to grow by 2%, with adjusted earnings expected to rise by 9%. For 2025, management anticipates low single-digit organic growth and mid-single-digit earnings growth [4]. - Despite these challenges, PepsiCo's dividend yield remains historically high at approximately 3.5%, making it an attractive option for investors seeking stability [5]. Group 2: Enterprise Products Partners - Enterprise Products Partners operates in the midstream segment of the energy sector, which is less volatile compared to upstream and downstream segments [6]. - The company generates revenue by charging fees for the use of its infrastructure, making it less sensitive to commodity price fluctuations and maintaining robust demand even during economic downturns [7]. - Enterprise has increased its distribution for 26 consecutive years, has an investment-grade balance sheet, and its distributable income covers its distribution by 1.7 times, with a high yield of 6.4% [8]. Group 3: Black Hills Corporation - Black Hills Corporation is a regulated utility serving 1.35 million customers across several states, focusing on reliability and stability [10]. - The company has achieved Dividend King status due to its consistent dividend growth, with a current yield around 4.5% [10]. - Management targets long-term earnings growth of 4% to 6% annually, making it a low-risk investment option for those seeking stability in turbulent market conditions [11]. Group 4: General Investment Strategy - In light of market volatility, investors are encouraged to consider reliable income stocks like PepsiCo, Enterprise, and Black Hills, which have been undervalued and are gaining attention from Wall Street [13].

Core Viewpoint - The recent sell-off in AI stocks, particularly Nvidia, presents a buying opportunity for long-term investors despite a 30% decline from its all-time high [1] Group 1: AI Adoption and Market Potential - The AI industry is still in its early stages of adoption, with significant spending expected on AI-related hardware by 2025 [2][3] - Nvidia's GPUs are essential for AI training and inference, making them the preferred choice for AI infrastructure [2] Group 2: Technological Advancements - Nvidia's new Blackwell architecture significantly enhances performance, allowing AI models to be trained four times faster and achieving 30 times greater inference speeds compared to the previous Hopper architecture [4][5] Group 3: Revenue Growth - Nvidia has demonstrated substantial revenue growth, with a 265% increase in fiscal year 2024 and a projected 114% increase in fiscal year 2025, followed by an expected 56% growth in fiscal year 2026 [6][7] - Despite a decrease in percentage growth, the absolute revenue increase is accelerating, indicating strong and growing demand for AI [7] Group 4: Margin Recovery - Initial concerns about declining gross margins are attributed to ramping up Blackwell production, with expectations for margins to recover to the mid-70% range as production efficiency improves [8][9] Group 5: Stock Valuation - Nvidia's stock is currently reasonably priced, with its trailing price-to-earnings (P/E) ratio at levels not seen since 2019, and a forward P/E of 25 suggests it is an attractive investment opportunity [11][12]