Nvidia is the New King
The posterchild of the artificial intelligence (AI) megatrend officially became the largest publicly traded company in the world. Nvidia (NVDA) passed both Microsoft (MSFT) and Apple (AAPL) on its way to hitting a market valuation of $3.4 trillion. All three major tech companies now boast valuations over $3 trillion – another first-time achievement.
Another interesting stat – the total value of the entire Russell 2000 Index is $2.9 trillion – less than the valuation of just one of the big three companies. For more on small-cap stocks and the opportunity, make sure to check out Friday’s SteadyTrade Podcast where Tim Bohen and I share some of our favorite small-cap stocks.
First Trade in the Books
On Thursday, we issued our first sell alert in my new investment service – NextWave Trader. I’m pleased to share that we booked our first profit of 45% in less than one week. As part of our long-term strategy, we sold half our position in Super Micro Computers (SMCI) and will let the other half continue to move toward our target of a 100% gain. Thank you to all our subscribers and congrats!
Bitcoin Bull Continues to Buy as Price Falls
MicroStrategy (MSTR) announced this week that it bought more bitcoin between April 27 and June 19 after raising money through a sale of convertible notes. The company, led by bitcoin bull Michael Saylor, bought an additional $786 million of bitcoin, or 11,931 coins. That results in the major purchase buying bitcoin at an average of approximately $65,878. The company now owns a total of 226,331 bitcoin worth about $14.8 billion.
The news comes as the price of bitcoin recently fell below $65,000, sparking some concern among investors. As a long-term bull as well, I continue to hold my long-term position along with other cryptocurrencies. The pullback must be put into perspective – the largest cryptocurrency is down 11% from an all-time high. For an asset class with its volatility, a pullback of 11% from a high is pretty-much standard and expected.
The U.S. Needs New Homes
New home construction fell to its slowest pace of growth in four years with housing starts down 5.5% from last year. Even the forward-looking building permits hit a four-year low down 3.8% from a year earlier. This is the lowest level since the pandemic-induced slowdown of home building.
It may not be a huge surprise to most with interest rates still elevated. But there is a bigger issue here and that is the lack of homes in the United States. The homeowner vacancy rate fell to 0.8% in the most recent quarter – near the lowest level ever and well below the average over the last few decades.
According to a report out of Freddie Mac this week, the U.S. needs an additional 1.5 million vacant for-sale or for-rent homes to get back in-line with the historical average. This is a great investment opportunity for a number of housing-related sectors. The obvious choice here are the homebuilders that will be tasked with building new homes. Several homebuilders reported earnings this past week and the results were mixed.
Other sectors set to benefit are building materials, copper (essential to building), and niche areas such as makers of HVAC systems, doors, roofs, etc. A few stocks on my current watch list that fall into this category include Beacon Roofing (BECN), AZEK Company (AZEK), and Trane Technologies (TT).
Here’s to the future,
Matt McCall Editor, Market Insights
The post Weekly Recap – Week of June 17 appeared first on Centurion Publishing.
