Game On for Nvidia, AMD Coming Into CES 2025
Here's my take on these two key tech stocks as the Consumer Electronics Show hits next week.
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Ready to rock? Hope so. While traders will see an unplanned market holiday next Thursday to honor the late President Jimmy Carter, we have the first big industry conference of the year to contend with -- coming at a volatile time for equity markets. I am referring to the Consumer Electronics Show.
Organized by the Consumer Technology Association, the event will officially kick off on Jan. 7 and run through Jan 10 in Las Vegas. There will be press-related events held from Sunday on into the actual show, so this is really a week-long shindig full of appearances by CEOs and other leaders of elite tech firms as well as leaders from a few firms that one might not think of in that light.
Coming into the event, the two names I'll be watching most closely will be Nvidia NVDA and Advanced Micro Devices AMD.
Two 'Monday' Names
These two high-end chip names will compete directly with each other, holding pre-CES press conferences on Monday. Batting lead-off will be Advanced Micro Devices at 2:00 p.m. ET. Expect Senior Vice President and GM of the Computing and Graphics Group Jack Huynh along with several other AMD executives (but not likely CEO Lisa Su) to stay focused more on the company's expansion in its share of the PC and gaming businesses as well as at least going over or highlighting the AI-related product portfolio, which has had less success competing with Nvidia than the company has had competing with Intel INTC in the PC space. Potentially, AMD is expected to reveal newly updated chipsets at the event.
AMD is a major company and is interesting, but Nvidia founder and CEO Jensen Huang, also known simply as "The Fonz," will likely wear his trademark leather jacket and help kick off CES 2025 with Monday's keynote address at 9:30 p.m. ET. Nvidia has been the "It" chip company, and really the "It" tech company since the emergence of the data center cloud and then the rise of the revolution in generative artificial intelligence. Nvidia has really been leaving competitors like AMD, Broadcom AVGO and Marvell Technology MRVL fighting over scraps.
After Huang's high profile public speaking event, Nvidia will host the media, analysts, clients and partners at the Fontainebleau Resort in Las Vegas. The set-up at that resort will feature hands-on demos meant to showcase innovations in AI, robotics, and accelerated computing across the automotive, enterprise, and robotics fields, as well as a focus on the foray into what it calls the "Omniverse," which seems similar to what Meta Platforms META calls the "Metaverse."
The company's technologies will also be featured on the show floor at the Las Vegas Convention Center where attendees will be able to participate in an interactive scavenger hunt featuring different missions, with points and prizes awarded.
Just a Heads Up
- AMD is expected to report in late January. Wall Sreet is looking for an adjusted earnings per share of $1.09 on revenue of $7.53 billion. That would be up from an adjusted $0.77 for the year-ago comp and be good enough for year-over-year sales growth of 22%.
- NVDA is expected to report in late February. Wall Street is looking for an adjusted EPS of $0.85 on revenue of $38.03 billion. That would be up from an adjusted $0.52 for the year ago comp and be good enough for year over year sales growth of 72%.
The Charts
This chart is very similar to the chart of NVDA that I drew up for you almost a month ago. Readers will see that the 50-day simple moving average did crack, but the lower trendline of our Pitchfork model has.
The neckline of the intra-pitchfork head & shoulders pattern was indeed pierced to the downside but never truly broke. I told you that I would not add to this position in December if the shares stayed between $132 and $146. The shares bottomed for the month at $127, I thought that they were going lower at the time, and I did not add. That was a mistake.
Currently, if the shares can take on their own 50-day SMA and maybe recapture support there after recapturing that spot. I would love to add ahead of CES if that happens today, which is in my opinion probable. In short, I intend to put on a shorter-term long side trade in NVDA ahead of next week's clambake that would be outside of or around my longer-term position, which is smaller than it had been in November. My current target for that long is $161. That said, the shares would have to take out the November high of $153 to get there and that itself would likely provoke an upside change in target from $161.
On the other hand, AMD has put together a beautiful double-bottom reversal pattern with a $174 pivot. That is as long as the stock does not make a new post-August low on this recent mini drop. I am not as confident in how AMD shareholders react next week as I am in NVDA shareholders. Lisa Su would be in Vegas and on stage if AMD expected to lead the industry in a dramatic way. Because of this recent wavering, I will not add to my already diminished long position in this name just because the shares are at the bottom of the pattern. That said, I am interested in adding if the shares can retake their 21-day exponential moving average (green line) because then at least I know that I'll have some swing-traders on board looking to get the stock to its 50-day SMA.
At the time of publication, Guilfoly was long, NVDA, AMD, INTC equity.
