Financial Advisors Put NVIDIA Corporation in Spotlight Following Strong Results and Positive Outlook; Small-Caps Receive Some Unusual Attention - InvestingChannel

Financial Advisors Put NVIDIA Corporation in Spotlight Following Strong Results and Positive Outlook; Small-Caps Receive Some Unusual Attention

After several weeks of mostly gains and positive news, the last week was a bit tumultuous for the stock market. Among main indexes, the S&P 500 and the Dow Jones Industrial Average inched down by 0.13% and 0.27%, respectively, and registered the first two-week losing streak since August. Both Indexes were affected by concerns regarding the passage of the Republican tax plan and a pullback in commodities in the middle of the week, which caused a global sell-off. The stock market was also dragged lower by the decline in oil prices that came on the back of the International Energy Agency cutting its outlook for oil demand growth by 100,000 barrels per day for 2017 and 2018.

On November 15, the S&P 500 registered its worst day in two months, affected by the drop in energy, consumer staples, and technology stocks. Target Corporation (NYSE:TGT) was among the biggest losers in the S&P 500 as the stock lost 10% on the back of the company’s third-quarter earnings report, which included a weak outlook. On the same day, Dow Jones saw its worst close in more than three weeks, dragged by Caterpillar Inc. (NYSE:CAT). However, on Thursday, both indexes rebounded slightly following strong results from Wal-Mart Stores Inc (NYSE:WMT) and Cisco Systems, Inc. (NASDAQ:CSCO). On the other hand, the NASDAQ Composite advanced by 0.46% between November 14 and November 17, helped by Cisco and Tesla Inc (NASDAQ:TSLA), the latter registering a jump after its CEO Elon Musk unveiled the Tesla Semi truck and the Tesla Roadster.

As Dow Jones and S&P 500 registered the second consecutive week of declines, investors have started to express more concerns about the market entering a cool-down phase. There’s still some uncertainty regarding the tax reform and last week’s economic data from China also sparked concerns regarding the global growth as retail sales, industrial output and fixed asset investment growth figures came in below expectations.

However, there also was one under-the-radar group on the US stock market last week, small-cap stocks. Russell 2000, which is the benchmark index for US small-cap equities, gained 1.19%. And it looks like Financial Advisors have taken notice. TrackStar, InvestingChannel’s official newsletter capturing and analyzing the trends of Financial Advisors, has compiled the weekly top of the 20 most searched tickers among Financial Advisors, which was surprising compared to the previous week. For the first time in months, the top five most-searched tickers didn’t include exclusively big-name companies. On the third and fourth spot in the list were ITUS Corp (NASDAQ:ITUS), a $45 million company that develops a diagnostic platform for cancer detection, and WPCS International Incorporated (NASDAQ:WPCS), a nano-cap telecom company. Other small-caps that found their way into the list were Helios and Matheson Analytics Inc (NASDAQ:HMNY) a Rite Aid Corporation (NYSE:RAD).

On the first and second spots in the list of the most searched tickers were NVIDIA Corporation (NASDAQ:NVDA) and Equifax Inc. (NYSE:EFX), which had reported their results the previous week. The usual giants that had been found on the top spots in the previous weeks, Apple Inc. (NASDAQ:AAPL), Bank of America Corp (NYSE:BAC), Alibaba Group Holding Ltd (NYSE:BABA), were shunned lower down the list.

With this in mind, let’s take a closer look at the Financial Advisors’ most searched ticker last week, NVIDIA Corporation (NASDAQ:NVDA). The chipmaker posted its financial results on Thursday, November 9, after the bell and the following day the stock surged by over 5%. On Monday, the stock started on a positive note as investors continued to process the results and analysts started to issue their updates, but it started to lose ground in intraday trading and amid some volatility the following days, NVIDIA Corporation (NASDAQ:NVDA)’s stock lost 2.21% between November 13 and November 17.

For the third quarter of its fiscal 2018, NVIDIA Corporation (NASDAQ:NVDA) reported revenue of $2.64 billion and record GAAP EPS of $1.33, both beating the consensus estimates by $280 million and $0.26, respectively. The company’s revenue surged by 32% on the year, helped by strong datacenter sales (which includes sales of GPUs for cloud providers) and Gaming-related sales, which amounted to $501 million and $1.56 billion, respectively, both figures beating FactSet consensus estimates. In addition, NVDIA Corporation (NASDAQ:NVDA) projected fourth-quarter revenue guidance of $2.65 billion and increased its dividend by 7% to $0.15, adding that it intends to return $1.25 billion to shareholders next fiscal year.

Following positive results, several analysts upgraded their outlook on NVIDIA Corporation (NASDAQ:NVDA)’s stock. Among them, BMO Capital raised its rating to ‘Market Perform’ from ‘Underperform’ and increased the price target to $200 from $135 on Monday. BMO Capital analyst Ambrish Srivastava said in a note to clients cited by CNBC that they changed their view on the company after having seen that their “underperform call did not work out”. Another skeptic, Nomura Instinet, also upgraded the stock to ‘Neutral’ from ‘Reduce’ and set a price target of $190 versus the previous $110, with analyst Romit Shah admitting that they underestimated the company’s Datacenter segment, according to CNBC. Shah added NVIDIA showed “good diversity” in the gaming segment with Nintendo Switch and the cryptocurrency market also helped offset weakness in its core gaming segment. In addition, Stifel boosted its price target to $184 from $110 and Mizuho raised the price target to $225 from $220.

NVIDIA Corporation (NASDAQ:NVDA)’s stock has more than doubled since the beginning of the year, helped by strong trends in the cryptocurrency market, which had a positive impact on sales of NVIDIA Corporation (NASDAQ:NVDA)’s graphics cards. NVIDIA Corporation (NASDAQ:NVDA) investors have a lot to look forward to as the company is strengthening its leadership position in emerging technology trends such as cryptocurrency mining, autonomous vehicles and artificial intelligence.

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