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This Is Not Investment Advice
GPU/TPU debate center stage plus all of the other concerns about AI. Along with the nonstop mantra about the “Santa Rally” comes a new pounding on that table: the new AI Trade. We’re open minded and even expecting a recalibration and shifting beneath the surface regarding AI and the market action, so let’s see what’s up.
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Before we get into the specific stocks - the Nasdaq General Market Indicators from Investor’s Business Daily for after the 12/2 close:
CLS is still the #1 rated stock by Investor’s Business Daily. Apparently Wall Street (at least based on some notes here and there) sees CLS as a “GOOG aligned AI play” meaning it is now a play on the GOOG momo (and associated infra) and not the NVDA specific AI momo. Fair enough. Can’t really knock CLS the stock has been a beast and presumably the people at the company are simply plugging away trying to do the best they can. LITE is looped in here as well and we know in a general sense that LITE has been on fire (also helped boost VIAV).
GOOG, LITE, AVGO, and CLS are now the four AI Trade Leading Stocks - according to let’s say recent professional investor sentiment. Let’s take a look at the Daily Chart (with 21 EMA shown) and Technical Ratings for each from Investor’s Business Daily.
AVGO
AVGO Daily
GOOG
GOOG Daily
CLS
CLS Daily
LITE
LITE Daily
Thoughts and observations:
All four of these likely very nice businesses doing their thing and trying to build and grow as much as they can . . . . that is not the question . . . . . . and maybe they ARE the “correct” options for an updated version of the ‘Melt Up’ . . . . but even so the issue is if RIGHT NOW and RIGHT HERE these Four Horsemen plus a few others can carry the entire load (along with trying to muscle BTC up to do the same) . . . .
CLS is already wrestling with 21 EMA and failed a few times trying to make new highs . . . . GOOG is worth nearly $4T it ain’t doubling in a month . . . . others look like at a minimum a visit to 21 EMA not outrageous at all . . . maybe that’s fragmentarily why Daq Acc/Dis rated D- . . . .
How does it all net out . . . . . is GOOG leading the new Four Horsemen enough to counter and overcome any lingering and persistent weakness with the “old AI Trade” when simply looking at market cap weightings, how the indices work, mathematics and literal constraints, etc. . . . . “a sinner once, a sinner twice, no need for confessions now, cause now you have got the fight of your life” . . . .
Does Option GOOG or Option NVDA incorporate more total spend over time? Are TPUs the true savior or an intermediate step? I have no idea but the market is and will sniff this out . . . .
