Nvidia Earnings a Major Test for AI Stock Rally
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Nvidia earnings on Wednesday will be a major test for the AI-led market rally. Nvidia's results and guidance could significantly impact NVDA stock as well as rivals like AMD and AI plays.
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The stock market rally held up relatively well last week despite hot inflation data. But the Nasdaq is getting extended while frothiness in AI stocks is a concern.
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Super Micro stock plunged 20% on Friday in a potential climax top after surging over 240% in less than a month. It's now at high risk of a larger pullback.
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Investors may want to consider trimming or taking some profits in extended AI stocks going into the Nvidia earnings. Have exit strategies ready.
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Outside of earnings gaps, there are few buying opportunities. Investors can look to add holdings in non-AI areas to diversity. It's a time to be cautious and flexible.