Bank of America explains why it’s not just about Nvidia anymore
"The bar has been high this earnings season, especially for Tech, and our Semi analyst sees more volatility ahead," wrote the investment bank."But it's not just about NVDA anymore."
The bank feels that AI benefits are broadening to power, commodities, and Utilities. They also believe that fundamentals are broadening,"NVDA drove 37% of S&P earnings growth over the LTM , but is expected to drive just 9% over the next 12 months," explains the bank."Hyperscalers are in the first year of a multi-year AI investment cycle. Avoid capex growers."
Furthermore, BofA highlights that NVDA options are pricing in an 8.5% implied move for Q1 earnings, much lower than the reaction to three of the last five quarters.the bank."Conversely, companies that missed got penalized much more than usual, underperforming the S&P 500 by 350bps vs. the historical average of 240bps.
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