Broadcom Release Could Propel the Stock Rally Further
Fed chair Jerome Powell delivered remarks to the House committee on financial issues by saying that the US team of central bankers will approach interest rate cuts carefully as major economic parameters like growth and labour data look tight. However, he emphasized that the governors are going to reach confidence to launch cutting rates "sometimes this year". Of course, there was no specific message in his words, so that has not interrupted the broad uptrend on Wall Street. As a result, the S&P 500 futures slowly went to new heights, with nearest targets for March at nearly 5,200. Meanwhile, an assortment of assets, mostly consisting of AI-fuelled growth businesses, keep delivering nice surprises every day.
This Wednesday, CrowdStrike (CRWD) spiked by more than 20% in the opening trading gap, peaking at $365 per share. A fast wave of profit taking brought it down to now-a-support area below $320, so that I decided to add more to my stake in the stock, which already doubled its market value, as well as my profit from it, in less than five months. Even if the price comes close to $300, it will do no harm, only benefits by attracting newcomer bulls again. As one of cybersecurity leaders, CrowdStrike beat consensus numbers on Q4 earnings, giving bright guidance especially for the cloud segment that the crowd likes so much. Several large investment houses shifted their target prices for CRWD to $400 or above.
Qualcomm (QCOM) added another 2.7% in the first half an hour after the opening bell on March 7, peaking above $172 per share, yet it has at least $20 of space to the upside if one believes in repeating the all-time records of January 2021. Riding this positive wave, NVIDIA jumped to "emergency number" of $911. Going too fast, yet I expect at least $950 before I am going to run away. Right now, it looks too early to hide the nests or fold everything, yet too many guys in this market are waiting for $1000 in NVIDIA, so that smart people may start profit fixing when we are all just around the corner from this four-digit number. In March, I am going to liquidate most of my stakes in NVIDIA, before it smells like roast. Other AI stocks are good enough yet not so viral or meme assets.
Ultimately, Broadcom (AVGO) quarterly release is widely awaited after the market close on March 7 to bring even more manna from heaven on our heads. If everything will be OK with the report, this may boost other AI stocks even higher. Yet, if some weaknesses would be detected in numbers from a nearly $650 billion business, it already passed the way from $900 in early November to $1400 in this month, and keeping the stake intact looks as a reasonable solution personally for me, even in case of temporarily and sharp price adjustment. Dip buyers would not be slow to come to the rescue when NVIDIA and others continue to hit records. With all that being said, surpassing $1500 could be a dangerous red line when I would think at least of selling a good half of my stake here.
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