VIDEO: Wall Street Lifts Nvidia Price Target

In today’s Daily Rundown video, Chris Versace reviews how continued Middle East tensions are weighing on the market, but explains why we could see calmer days ahead, a potential positive for the market. 

We also review a fresh survey of economists for what they expect the Fed to deliver between Wednesday and the end of the year. 

Chris revisits our comments on Meta META aiming to monetize WhatsApp, reviews a new Wall Street price target increase for Nvidia NVDA and data from Nielsen that shows Google’s GOOGL YouTube is now the TV king. 

Transcript

CHRIS VERSACE: Hey, folks, Chris Versace here. It is Tuesday, June 17, and stocks remain lower as tensions in the Middle East have, as we know, escalated. Now, with President Trump calling for unconditional surrender from Iran. And while President Trump has left the G7 summit earlier than expected, raising some questions about potential progress on trade deals, the G7 leaders have affirmed unified support for Israel and condemned Iran for being the principal source of regional instability and terror.

Hopefully, folks, this means that the conflict will be resolved in the coming days and that all things being equal, that should be good for the market, especially if oil inflation fears are erased. Now, while we continue to monitor those developments, we do have ahead of us, as you know, the outcome of tomorrow's Fed policy meeting. And a latest survey of economists show that heading into that meeting, based on all the data that we've seen, this survey finds that this gaggle of economists expects two rate cuts this year, with the first in September and only one rate cut next year.

The overwhelming majority of those economists cite trade policy as being uncertain, and that is leading those economists to call for slower growth and, you guessed it, higher inflation ahead. Our view, in a world of potential stagflation, that is slower growth and higher inflation, the Fed is likely to do less than more. But as you know, we'll continue to follow the data and adjust our thinking both for the market, the economy, and of course, the portfolio as needed.

We will have much more to say about the Fed, Fed policy, and all of that after we not only receive the Fed's policy statement tomorrow and updated set of economic projections, but also after we've had a chance to digest the comments made during Fed Chair Powell's press conference. Terms of portfolio news, yesterday we discussed with you how Meta is looking to monetize WhatsApp. And no surprise, that led to a wave of bullish comments across Wall Street, Wells Fargo, Loop Capital, and others.

The bottom line is that they all agree with what we said about the positive impact on Meta's revenue and EPS, as it looks to monetize this next leg of its platform stool. The big question for us is when will this begin? And based on when that happens and based on the initial uptake of that effort, we will revisit our price target for Meta. So we'll have to hang on to that. But we do know that is a coming catalyst for the shares.

Speaking of other Wall Street happenings related to the portfolio, Barclays boosted its NVIDIA target to 200 from 170, citing positive channel checks that point to NVIDIA's July quarter revenue being stronger than the current market consensus. Now, as you know, we tend to track the data pretty carefully. We've been monitoring figures from both Taiwan Semiconductor, Foxconn, and others. And once we have the June figures in hand, those will likely be published in early July or so, we will revisit our NVIDIA target.

But just generally speaking, giving all the signals that we're seeing about AI and data center demand, AI and data center construction activity, and enterprise adoption, we would concede that there is more likely to be upside to our NVIDIA price target than it remaining unchanged in the weeks ahead, or possibly even being revised lower, which is something we don't see. So we're aware of that, and we will continue to follow the data and make any adjustments as we see the data indicating we need to do so.

So stay tuned for that. And speaking of data, Nielsen is showing that streaming video continues to simply eat away at traditional broadcast television and cable. In fact, in May, streaming outpaced the combined share of broadcast and cable TV for the first time ever. Streaming accounted for about 44.8% of total TV viewership in May. The largest month to date. Broadcast around 20.1%. Cable, 24.1%.

Now, where this gets really interesting for us in the portfolio is who is the leader? YouTube, at 12.5% of all television viewing. An obvious positive data point for Google's advertising business. But as we step back, the data from Nielsen does explain some of the comments that we shared with you in recent weeks about the shift from Trade Desk to Amazon's advertising business. So we always like to see confirmation data points. We certainly see this report as one.

Remember, Amazon continues to lean into advertising for Prime Video. We think that much like Netflix, there is going to be some positive surprises in the advertising businesses for Amazon in the coming quarters. It's a high margin business, kind of a sleeper business. A lot of people tend to focus more on Amazon Web Services, obviously given its size and the size of its operating profits, and of course, the digital shopping business, which should see a nice seasonal strength in the back half of the year given the extended four-day Prime Day event this year, but also one that will likely see around the October time frame as Amazon helps folks get ready for the holiday shopping season.

So that's quite a bit to cover, but I will say we still have more ahead. Remember, Marvell is having its custom AI silicon event this afternoon, so be on the lookout for our thoughts, our comments on that later today. Thanks for watching, and please remember, check your alerts.

At the time of publication, TheStreet Pro Portfolio was long META, NVDA and GOOGL.