Wealth can only be accumulated by the earnings of industry and the savings of frugality. – John Tyler
A couple quick updates on the earnings reports from last night.
Nvidia reported a fine quarter and guided just about inline, which is pretty much what I’d expected heading into that call last night. More importantly, I really liked what I heard from management about the next chipsets and gaming devices being rolled out in the second quarter. There’s a good chance this stock could ramp into that rollout on hype alone. We’ll see. I’m not selling any of my NVDA common or calls.
NTAP reported a fine quarter and guidance was pretty good, but as I’d expected, the stock had run up too far too fast into the report. The stock was down more than a $1 earlier this morning and is still acting very soft. A trade is a trade is a trade, so if you did any of those puts yesterday, you’re probably about breakeven on the trade and it’s probably time to just move on and sell ’em.
Cisco reported a fine quarter and guidance was fine too, but there’s two main takeaways you need to know from that report last night. First, the company’s seeing some softness in the enterprise but that carrier demand is strong. Juniper is the better play on carrier vs. enterprise. And also, Cisco’s inventory levels are at the lowest levels they’ve been since early 2009. When inventory levels are low, the supply chain has to order more boxes to be built and that will trickle down into the component suppliers of Cisco regardless. That means we could look at XLNX or ALTR as possible supplier plays on that theme.
Other than that, steady as she goes this morning. I’ve got more ideas coming your way in the next few days, so stay tuned. Back in a bit.