BREAKING: THIS STOCK IS CRASHING AFTER HOURS...
In a Nutshell
Nvidia beat earnings but saw mild after-hours selling after a massive rally, with the speaker preferring to hold long-term despite the high valuation. Rocket Lab's $3 billion stock offering triggered a sharp sell-off, illustrating the risk of holding overhyped speculative stocks after big runs. The speaker emphasizes taking profits on winners rather than becoming a bag holder, while contrasting this with disciplined, calculated trading on quality setups.
These notes were generated by AI and may contain inaccuracies.
Nvidia reported better-than-expected EPS and revenue with solid guidance. Despite beating expectations, the stock is trading down slightly in extended hours following its recent rally to a new all-time high of 241. The speaker notes that the high bar for Nvidia may mean some gains were already priced in. The stock trades at a relatively high P/E ratio of around 45 times, though this is considered reasonable for the company leading the AI revolution. The speaker prefers holding Nvidia for long-term investment rather than trading it around earnings.
Nvidia has historically shown somewhat negative post-earnings reactions in the last nine instances. Nvidia also announced an $80 billion share buyback program, signaling confidence in its growth and willingness to increase ownership of its own shares.
Rocket Lab announced it will sell $3 billion in common stock, which the speaker views as a negative signal. This announcement caused the stock to lose one-tenth of its value within hours. The company had been heavily hyped on social media, with some promoters suggesting targets as high as $200 or even $1,000 per share after an already strong run. The speaker describes Rocket Lab as an overhyped and irrational stock.
The speaker contrasts this with Nvidia's buyback, noting that buying back shares is the preferred action from a growing company. Rocket Lab's situation illustrates the risks of holding speculative companies that deliver rapid short-term gains. The speaker advises taking profits in such positions rather than becoming a bag holder.
The NASDAQ traded irrationally into the close, hitting new highs before selling off in extended hours. The speaker traded two stocks during the session. On Marvel, they took a short position during an overbought reversal in their live trading session, exiting near pre-market support for a $3,500 profit. On Micron, they went long after it became oversold and established support, riding it back to highs near 733 for an $8,300 profit.
The speaker notes that semiconductor stocks pushed higher ahead of Nvidia's earnings due to overall market irrationality. They recommend using Rocket Lab as an example of why investors should not fear taking profits on speculative names with large short-term gains.
Open Door is presented as an even worse example of bag holding. While most stocks benefited from the AI rally over the past six months, Open Door fell from $10 per share to below $5, losing 56% of its value. The speaker uses this comparison to reassure Rocket Lab holders that their losses are less severe than those holding Open Door.
The speaker prefers trading quality setups with intentional trades and calculated risk rather than speculative assets. Live trading sessions occur every morning at market open. Viewers interested in this approach are invited to join via the second link in the description. Those seeking higher-risk trades are told that LPP may not be suitable for them.
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