CWS Market Review – May 24, 2024
“If markets were rational, I’d be waiting tables for a living.” – Warren Buffett
Wall Street finally had a bad day. For most of this month, the stock market has steadily marched higher. Any setback was minor and short-lived. The S&P 500 opened higher on Thursday and reached a new all-time intraday high.
But the bears moved in and took revenge. By the closing bell, the S&P 500 had lost 0.74%. Sure, not a big loss, but it is the largest drop since May 1. Not even Nvidia could save the bulls.
I need to explain that Wall Street has gone totally gaga for Nvidia. Think of Nvidia as David Cassidy in 1971 and Wall Street is a bunch of screaming teenage girls. I’m exaggerating, but not by much.
Nvidia is the leading AI-themed investment, and its business is on fire. It reported earnings this week, and all of Wall Street came to a halt to see the results. As expected, they were amazing. Nvidia reported earnings growth of 461%. For the quarter, Nvidia made $6.12 per share, while consensus was for $5.60 per share.
Nvidia also boosted its dividend by 150% and announced a 10-for-1 stock split. On Thursday, Nvidia topped $1,000 per share. Here’s an amazing stat: The stock split will bring the nominal share price back to where it was 19 months ago. That’s bonkers.
Many of our Buy List stocks are holding up well. This week, Amphenol announced a 2-for-1 stock split. Cencora raised its guidance. Intuit reported earnings that topped Wall Street’s forecast by 5%. The TurboTax folks also raised guidance. I’ll tell you all the details in just a bit.
We have another off-cycle earnings report coming next week from Heico. The aircraft-parts supplier also just hit a fresh 52-week high. I’ll go over it in a bit. But first, let’s look at the impressive earnings report from Intuit.