Author: openjargon

We’re now into the second week of the 2025 financial year for ASX shares, and it’s been a fairly decent start to FY25 for the stock market and most ASX shares. Since the end of FY24, the All Ordinaries Index (ASX: XAO) has risen by around 0.3%.

But given that we’re still very much in the transition zone from FY24 to FY25, it’s still a good time to look back and check out some of the best, worst, and most interesting shares of FY24. So, with that in mind, today, we’ll be doing the latter and looking at the ASX’s highest-yielding dividend shares over the financial year just gone.

For simplicity’s sake, we’ll stick to the All Ords shares with market capitalisations above $1 billion. So, without further ado, here are the five highest-yielding ASX dividend shares of FY24.

The five highest-yielding ASX dividend shares of FY24

Our first ASX dividend share worth discussing is the real estate investment trust (REIT) Charter Hall Long WALE REIT (ASX: CLW). This REIT specialises in holding property assets with long weighted average lease expiries (WALEs).

Long WALE REIT units doled out four quarterly dividend distributions over FY24, which were all worth an unfranked 6.5 cents per share. At the closing FY24 unit price of $3.25, this REIT had a trailing yield of 8%.

Next up we have the financial services company Insignia Financial Ltd (ASX: IFL). Insignia shares paid out a total of 18.6 cents per share in unfranked dividends over the past 12 months.

At the end of FY24, Insignia shares were worth $2.29 each. At this pricing, the company was on a trailing dividend yield of 8.12%.

Then we have the famous ASX iron ore stock Fortescue Ltd (ASX: FMG). Andrew Forrest’s iron ore giant once again brought home the dividend bacon in FY24. The company dispensed a final dividend of $1 per share last September, followed by an interim dividend of $1.08 back in March. Both of these payments came fully franked.

These two dividends resulted in Fortescue shares exiting FY24 at a dividend yield of 9.72% as of 28 June’s closing price of $21.41.

Next up is ASX coal stock Yancoal Australia Ltd (ASX: YAL). Over the past 12 months, Yancoal delighted its investors with two large and fully franked dividend payments. The company’s September interim dividend was worth 37 cents per share, while the final dividend from April came in at 32.5 cents per share.

Put together, those two dividends gave Yancoal shares a trailing dividend yield of 10.5% at FY24’s closing share price of $6.62.

Our final ASX dividend share is listed investment company (LIC) WAM Capital Ltd (ASX: WAM).

As it has been doing for more than five years now, WAM doled out an annual total of 15.5 cents per share in fully franked dividends over the past 12 months. At WAM Capital’s last share price of $1.43 in FY24, this LIC had a trailing yield of 10.84%.

Are these high-yield ASX dividend shares worth buying?

So, we’ve established that these five ASX dividend shares paid out huge sums of dividend income over FY24. But does this mean they are automatically good buys for FY25 and beyond?

Well, no, in a word. Just because an ASX dividend share trades on a high dividend yield doesn’t mean it’s a good buy.

Remember, a share’s dividend yield reflects the past, not the future. And no share is under any obligation to pay out the same level of dividends it funded over one year in another.

It could even be argued that a high dividend yield is a red flag that requires additional homework to be done on our part to ensure that we’re not making an investing mistake.

Everyone loves a dividend on the ASX. So when the market allows a share to trade with a high dividend yield, it usually indicates that the markets don’t view the previous level of income the company provided as sustainable going forward.

Otherwise, investors of all stripes would rush to lock in that 7%, 9% or 10% yield and push up the price of the shares (thus lowering the dividend yield).

Looking at the shares above, we can see that they are not ideal candidates for dividend stability. Yancoal and Fortescue, for example, are mining companies whose profits are highly dependent on the prices of the commodities they mine. If coal or iron ore prices collapse, dividends from these companies will probably dry up quickly.

Spotting a dividend trap

The Charter Hall Long WALE REIT doesn’t have this problem of course. Its dividend distributions have been remarkably stable in recent years. However, REITs are highly influenced by interest rates. And the current uncertainty over what the Reserve Bank of Australia RBA) will do next when it comes to rates is probably keeping some investors away from this dividend stock right now.

Insignia Financial is arguably more of a case of a classic dividend trap. This company’s shares, and dividends, have been on a downward trajectory for years. Sure, there’s a chance this company can turn things around. But the market clearly isn’t betting it will do so. Hence the high yield currently on display.

It might be a similar story for WAM Capital. This company’s shares have also been in a downward spiral for years – investors have taken a 32% hit since this time in 2019. WAM Capital currently doesn’t even have enough cash to cover its dividend for the next 12 months, so it’s clear what the market is pricing in on this one as well.

Foolish takeaway

When investigating a high-yield ASX dividend share, it’s important to delve deeper into understanding why the market is offering such a high dividend yield.

The market rarely makes mistakes with these things, so unless you’re absolutely sure you know something that other investors don’t, it’s worth exercising high vigilance if you’re considering a buy.

The post These 5 ASX dividend shares had the highest yields in FY24 appeared first on The Motley Fool Australia.

More reading

• ASX 200 coal stocks in focus as wind power fades to a breeze
• Here’s how the ASX 200 market sectors stacked up last week
• Fortescue shares: Here are the must-know highlights from FY24
• Broker sees Whitehaven shares and one other coal stock as top buys
• Fortescue shares red-hot as court reveals company espionage

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a disappointing decline. At the time of writing, the benchmark index is down 0.5% to 7,783.9 points.

Four ASX shares that are not letting that hold them back today are listed below. Here’s why they are rising:

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price is up 15% to 10.5 cents. Investors have been buying the lithium miner’s shares after it exceeded its FY 2024 production guidance. Over the 12 months, Core produced 95,020 dry metric tonnes (dmt) of spodumene concentrate and shipped 97,423 dmt. This led to Core Lithium reporting an unaudited cash balance of $87.6 million at 30 June, which is up from $80.4 million at the end of March. However, revenue will now dry up with all activities suspended at the Finniss operation. And while restart assessments are underway, management said that the resumption of activities “would only occur when we are confident the lithium market conditions support such a decision.”

Encounter Resources Ltd (ASX: ENR)

The Encounter Resources share price is up almost 21% to 88 cents. This has been driven by the release of drilling results from the Aileron project in Western Australia. The niobium explorer revealed that aircore drilling has intersected further shallow, high-grade mineralisation at the West Arunta-based project. Encounter Resources’ executive chairman, Will Robinson, commented: “Aircore drilling is defining new belts of shallow niobium-REE carbonatite hosted mineralisation in the West Arunta. Highly enriched, near surface mineralisation has now been intersected at both the Crean and Emily targets which are located on separate structures at Aileron, over 10km apart.”

RED 5 Limited (ASX: RED)

The Red 5 share price is up 8.5% to 40.7 cents. This morning, this gold miner announced that it has entered into a restructured hedge facility and security package, repaid all outstanding loans, and restructured the hedging from the legacy Silver Lake Resources Limited (ASX: SLR) common terms deed. In addition, it advised that preliminary group sales for the fourth quarter were 110,818 ounces of gold. This brought full year sales to 455,259 ounces of gold.

Regis Resources Ltd (ASX: RRL)

The Regis Resources share price is up 2.5% to $1.82. This follows the release of the gold miner’s fourth quarter and full year update. In respect to the latter, Regis Resources achieved production of 417,700 ounces of gold for FY 2024. This was within its group production guidance range for the period. Management also revealed that it achieved a record $109 million increase in its quarterly cash and bullion balance. This took its cash and bullion balance to its highest ever level of $295 million.

The post Why Core Lithium, Encounter Resources, Red 5, and Regis Resources shares are storming higher appeared first on The Motley Fool Australia.

More reading

• This ASX mining share is surging 26% on ‘high-grade’ drilling results
• Core Lithium share price leaps 9% as results catch short sellers by surprise
• 2 ASX 200 gold stocks racing higher on record results
• Why did the Core Lithium share price crash 90% in FY 2024
• Guess which 2 ASX All Ordinaries shares were the best and worst performers of FY24?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Share prices of Tesla (NASDAQ: TSLA) are up roughly 21% in five days since it was reported that second-quarter vehicle deliveries beat Wall Street’s expectations. However, the electric vehicle (EV) manufacturer’s longer-term downward trend remains in effect as it grapples with high interest rates, competition, and other macroeconomic factors.

Could the second-quarter deliveries indicate a sustainable recovery, or will Tesla continue fading out? Let’s explore what the next five years could have in store for this innovative EV leader.

Second-quarter deliveries beat expectations — or did they?

Tesla investors don’t have to wait until earnings (expected to be released this month) to get updated on the company’s performance. Management typically releases production and delivery data along with other vehicle manufacturers on a quarterly basis (it used to be released monthly). And the much-anticipated second-quarter numbers were no exception.

With 443,956 cars delivered in the second quarter, Tesla beat Wall Street’s consensus forecast of 439,000. But this is still down 4.8% from the prior-year period and represents the second consecutive quarter of declining deliveries after a 13% year-over-year drop in the first quarter.

The better-than-expected delivery numbers sparked a double-digit percentage rally in the stock price, but the automaker is not out of the woods yet. The extent of the weakness could be revealed when the company releases its full quarterly report.

Several key problems might come up. First is pricing. Automakers can drive volume growth by lowering prices. But this can come at the expense of revenue per car sold and margins. For Tesla, this could pose a big problem because its previously high margins are the main thing differentiating it from its uninspiring mass-market rivals.

In the first quarter, its operating margins fell from 11.4% to 5.5%. And continued declines could turn the company into just another automaker.

Musk to the rescue?

With a price-to-sales (P/S) multiple of 6.33, its stock trades at a significant premium over the typical large U.S. automaker. For context, Ford Motor Company and General Motors trade for a P/S of just 0.3 and 0.36, respectively. And if Tesla becomes just another car company, it could lose much of its $560 billion valuation. Shareholders are betting that CEO Elon Musk won’t let this happen.

Fresh off securing an equity-based pay package worth $44.9 billion, Musk is incentivized to do everything possible to boost the stock price. He seems to be downplaying the automotive opportunity in favor of new growth drivers like robotics and artificial intelligence (AI).

The company is working on Dojo, a supercomputer designed to help train its machine-learning models for full self-driving (FSD). While Tesla isn’t the only company tackling this effort, it has some advantages because of the vast amount of user data it can gather from its customers with FSD software installed in their cars. Musk says its robotaxi will be revealed on Aug. 8, along with its next-gen vehicle platform.

If the robotaxis are consumer-ready, they could unlock a new nonautomotive revenue stream for Tesla, while putting it in a prime position to explore other AI uses like warehouse automation or possibly even humanoid robots over the next five years and beyond.

Is the stock a buy?

Tesla has once again become a highly speculative company. If current trends continue, its previously high-margin EV business could become commodified over the next five years amid rising competition and lower pricing power. This isn’t enough to justify the stock’s forward price-to-earnings (P/E) ratio of 57 compared to the Nasdaq Composite’s average P/E of 32.

Investors who buy the stock now are betting on Elon Musk and his ability to transform the company into more than just an automaker through AI and robotics. This is a tall order. And the controversial executive has a track record of overpromising and underdelivering.

With that said, Musk has rescued Tesla from the brink on several occasions, so there is good reason for the market to have some faith in him. The stock looks like a hold pending more information.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Where will Tesla stock be in 5 years? appeared first on The Motley Fool Australia.

More reading

• ASX lithium shares: Screaming bargains or falling knives?
• 2 EV trends Tesla and Rivian investors should understand now
• Why Tesla shares kept rallying today
• Why Tesla stock continued to surge higher today
• Why Tesla stock popped ahead of second-quarter deliveries

Will Ebiefung has no position in any of the stocks mentioned.  The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended General Motors and has recommended the following options: long January 2025 $25 calls on General Motors. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Investors in S&P/ASX 200 Index (ASX: XJO) energy shares will want to keep a close eye on the latest supply and demand dynamics unfolding in Australia’s gas markets.

The big Aussie energy producers have struggled this year amid concerns a potential over supply of crude oil could see Brent crude prices averaging less than US$80 per barrel in the second half of 2024. Brent is currently trading for US$86 per barrel.

A bit over midway through 2024, Santos Ltd (ASX: STO) is the only one of the big three ASX 200 energy shares in the green, with shares up 2.6% year to date.

Woodside Energy Group Ltd (ASX: WDS) shares are down 8.5% over this period, while the Beach Energy Ltd (ASX: BPT) share price has dropped 8.2%.

While the outlook for crude supply and demand remains uncertain, it’s looking increasingly likely that domestic demand for gas will outstrip supply as soon as 2027.

Here’s what we know.

ASX 200 energy shares may be tapped to increase supplies

As you’re likely aware, Australia ranks among the world’s top LNG exporters, following the United States and Qatar.

But more of that export gas may have to be diverted to ensure sufficient domestic supplies. And more supplies will need to be brought online to avoid looming shortfalls. That’s according to the Australian Competition and Consumer Commission’s latest gas enquiry report.

According to the ACCC:

While there is forecast to be an overall surplus next year, there is a risk of a shortfall in the third quarter when demand for energy is typically higher due to demand for heating in winter. The risk has reduced with the extended operation of Eraring Power Station.

The report notes that the Australian Capital Territory, New South Wales, South Australia, Tasmania and Victoria will all depend on gas piped in from Queensland to avoid local shortfalls in the second and third quarters of 2025. And from 2029, Queensland will also require new sources of supply.

The ACCC said this emphasised “the need for sufficient gas pipeline and storage capacity, in addition to gas production”.

And in an indication that ASX 200 energy shares could be encouraged to increase production and bring new gas project online, the ACCC noted:

Forecasts indicate that the east coast gas market may experience gas supply shortfalls as early as 2027 unless new sources of supply are made available. This predicted shortfall is likely to take place one year earlier than what previous reports have forecast.

The report pointed to “delays in new gas projects” and higher-than-expected gas consumption to generate power as driving the looming gas crunch.

The post ASX 200 energy shares eyeing ACCC gas crunch warning appeared first on The Motley Fool Australia.

More reading

• What happened with the Woodside share price in FY 2024?
• 5 things to watch on the ASX 200 on Monday
• Here’s how the ASX 200 market sectors stacked up last week
• Best 5 ASX 200 energy shares for price growth in FY24
• Santos share price goes red as takeover rumours turn into hot air

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Now that we’ve rolled into the new financial year, Westpac Banking Corp (ASX: WBC) shares continue to show strength.

Westpac was a standout on the ASX last financial year. In the last 12 months, its share price has surged by 30% and currently trades at $27.16.

Meanwhile, the S&P/ASX 200 index (ASX: XJO) has delivered single-digit returns in the same time. Westpac consequently outpaced the benchmark’s return by a wide margin.

So, did you miss out by not buying Westpac shares in FY24? And what’s in store for the bank moving forward? Here’s a look.

Westpac shares perform in FY24

Westpac shares gained in FY24 amid general market strength and positive reaction to its operating results.

The bank’s half-year results in May showed a 16% decrease in net profit to $3.3 billion and a seven-basis-point contraction in net interest margin (NIM) to 1.9%.

Despite this year-over-year decline in income, investors weren’t swayed.

They welcomed the 7.1% increase in the interim dividend to 75 cents per share, alongside a fully franked special dividend of 15 cents per share.

Westpac also authorised another $1 billion under its share buyback program.

These are shareholder-friendly moves that saw Westpac climb past its previous 52-week highs and climax at $27.89 apiece on 8 May. The banking stock has since pulled back from this mark.

What’s in store for Westpac?

The bank has some big plans ahead. According to my colleague Tristan, Westpac’s UNITE program is projected to cost an estimated $1.8 billion in FY24 and then $2 billion annually from FY25 to FY28.

It aims to improve customer service, increase shareholder returns, and “close the cost-to-income ratio gap to peers”.

Analysts, meanwhile, hold diverse views on Westpac’s FY25 outlook. While concerns persist about its exposure to the Australian housing market, others commend its strong capital position and proactive dividend policies.

Goldman Sachs maintains a neutral rating on Westpac shares with a $23.71 price target. The broker cites valuation concerns as its reasoning despite a favourable earnings outlook. Westpac currently trades at a price-to-earnings ratio (P/E) of 15 times.

Morgans also rates Westpac a hold, searching for a price target of $24.15 per share. Meanwhile, the consensus of analyst estimates rates it a sell, according to CommSec.

Key takeaways

Westpac shareholders finished FY24 with a smile after the stock’s good performance. However, long-term investors are thinking beyond the year-to-year movements in a stock’s price or the market in general.

The key is to think about what’s to come instead of relying solely on historical performance. Historical performance is never a guarantee of future results.

As Warren Buffett puts it: “The investor of today does not get paid for yesterday’s growth”.

Westpac shares might have had a great run in FY24 – but you should never rely on past results and always conduct your own due diligence.

The post Did you buy Westpac shares in FY24? Here’s the recap appeared first on The Motley Fool Australia.

More reading

• ASX 200 bank shares ‘don’t appear overly expensive’ compared to global peers: UBS
• What is the outlook for ASX 200 dividend shares in FY25?
• These were the five best ASX bank shares to own in FY24
• Retirement planning guide: 710,000 Aussies to retire over next 5 years
• Here’s when Westpac says the RBA will cut interest rates after last week’s inflation data

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Are you on track with your retirement planning journey? As we enter a new financial year, our super contributions are worth checking to ensure we’re prepared.

Superannuation plays a crucial role in Aussies’ retirement savings strategy. Exploring average contributions across different age groups gives us valuable insights into retirement readiness.

In this article, I examine the average annual super contributions for individuals aged 45-49, 50-54, and 55-59. Please note that the averages used below are my calculations using FY22 data from the Australian Taxation Office (ATO).

Average annual contributions by age group

Based on the data, the average superannuation contributions for different age groups are as follows.

Ages 45 to 49: Increasing awareness of retirement planning

For individuals aged 45-49, the total average annual contribution for FY22 was $9,374, which included employer contributions of $7,418 and personal contributions of $1,500.

There has been an increase in personal contributions compared to the 40-44 age group, indicating growing awareness and proactive steps towards retirement planning.

Age 50 to 54: Heightened focus on retirement

The average annual contribution for this age group rises to $10,430. This includes employer contributions of $7,264, personal contributions of $2,495, and other contributions of $671.

It is worth noting that at this stage, contributions from employers have started to fall, reflecting changes in employment status and the transition to retirement. On the other hand, individuals are exploring various avenues to boost their superannuation, including salary sacrifice and other voluntary contributions.

Age 55 to 59: Intensive retirement preparation

For this older age group, the average annual contribution significantly increased to $12,803, including employer contributions of $6,897 and personal and other contributions of $5,027 and $879, respectively.

Reduced employer contributions could be due to various factors, such as changes in employment status or reduced working hours as individuals transition towards retirement.

The high total contributions reflect a comprehensive approach to retirement savings, combining employer, personal, and other contributions to build a robust retirement fund.

Are you increasing personal contributions enough?

An increasing number of people are making additional personal contributions to their superannuation through salary sacrifice, showing they understand the importance of saving more for retirement.

As the table below demonstrates, not only are more individuals making personal contributions as they get older, but the average amount of these contributions is also increasing.

The significant increase in personal contributions, especially through salary sacrifice, highlights a proactive approach to retirement savings. For instance, 21% of individuals aged 55-59 are making personal contributions, with an average contribution of $23,884.

While employer contributions form the bulk of superannuation savings, personal contributions are becoming increasingly important. This shift underscores the importance of individual efforts in securing a comfortable retirement.

Foolish takeaway

The average annual super contributions for individuals by age group highlight a growing focus on retirement savings. Many individuals are now taking proactive steps to bolster their superannuation through personal contributions, which tend to grow with age.

The post What is the average annual superannuation contribution for 45, 50, and 55? appeared first on The Motley Fool Australia.

More reading

• Why Core Lithium, Encounter Resources, Red 5, and Regis Resources shares are storming higher
• Where will Tesla stock be in 5 years?
• ASX 200 energy shares eyeing ACCC gas crunch warning
• Did you buy Westpac shares in FY24? Here’s the recap
• Could Nvidia stock help you become a millionaire?

Motley Fool contributor Kate Lee has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Nvidia (NASDAQ: NVDA) has reached record highs over the last year as it has become the poster child for a boom in the artificial intelligence (AI) market. Since the start of 2023, the chipmaker’s stock has skyrocketed 174%, while quarterly revenue and operating income have climbed 93% and 149%. Wall Street has rallied behind Nvidia as it has achieved a majority market share in AI graphics processing units (GPUs) just as demand for the chips has soared.

Uncertainty about how long Nvidia can keep up its bull run weighed on its stock toward the end of June and the start of July when it fell as low as $118 per share after hitting a high of $135 per share just days before. However, its share price rebounded on July 3, rising 4% as the slump proved temporary.

Meanwhile, the company still has plenty to be bullish about. Nvidia has years of dominance in the chip market under its belt, suggesting its role in AI is unlikely to dissipate any time soon. The chipmaker also has new product launches in the works that will likely continue to boost sales and earnings to retain its lead in the retail chip market.

Here’s why Nvidia stock could help you become a millionaire over the long term.

Nvidia has a long history of success in the chip market

Nvidia initially made a name for itself by carving out a dominating role in video games. The company was one of the first to begin selling chips to the consumer market, with gamers using its GPUs to build high-powered gaming PCs. Nvidia’s success in the industry has seen its desktop GPU market share rise from 65% in 2014 to 88% in the first quarter of 2024.

A lead in gaming chips perfectly positioned the company to gain a dominant role in data-center GPUs and, eventually, AI. In fact, according to IoT Analytics, Nvidia is responsible for more than 90% of the data-center GPU market. Many of these data centers have become crucial to the development of the AI market, powering platforms like Amazon Web Services, Microsoft‘s Azure, and OpenAI’s ChatGPT.

Nvidia has managed to retain its dominance in GPUs in different sectors across tech despite the persistence of companies like Advanced Micro Devices and Intel. For instance, while Nvidia has added more than 20 points to its desktop GPU market share over the last decade, AMD’s has actually fallen from 33% to 12%. Meanwhile, Intel briefly had a 4% share in Q1 2023, which has since dwindled to 0%.

The best is yet to come

We’re only about a year into the recent boom in AI, suggesting developers have barely scratched the surface of what’s possible with the generative technology. As the market progresses, chip demand is only likely to continue rising. Meanwhile, Nvidia is leveraging its lead to steer the industry in its favor and challenge its competitors.

In 2024, Nvidia transitioned to a yearly release schedule for new chips when a two-year cycle was previously the market standard. The shift forced AMD and Intel to follow suit. As a result, Nvidia is gearing up to launch its Blackwell line chips, the company’s next generation of AI training processors. CEO Jensen Huang noted at the announcement, “The Blackwell architecture platform will likely be the most successful product in our history and even in the entire computer history.”

A leading reason for Nvidia’s success is the software platform accompanying its AI chips, which it calls its Compute Unified Device Architecture (CUDA). Developers worldwide have grown accustomed to this ecosystem, with switching akin to how a user of Apple‘s iPhone might feel about switching to a Samsung phone. Consequently, Nvidia’s competitors will likely face an uphill battle trying to gain traction in AI.

Data by YCharts.

Moreover, the data in the table above shows the significant financial lead Nvidia has achieved over its competitors. Since last July, Nvidia’s operating income and free cash flow have skyrocketed far higher than AMD or Intel’s, indicating Nvidia is far more capable of continuing to invest in its business and retain its market dominance.

Despite recent growth, Nvidia’s price/earnings-to-growth (PEG) ratio sits at less than one, indicating its stock remains a value. Alongside nearly unrivaled dominance in the budding AI market, Nivida is a screaming buy this July and a stock that could make you a millionaire with the right investment. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Could Nvidia stock help you become a millionaire? appeared first on The Motley Fool Australia.

More reading

• Is Nvidia stock going to $144?
• Nvidia’s stock is up 160% in 2024, but is it a bubble waiting to pop?
• Can Nvidia stock cross $1,000 again after the stock split?
• One day, Nvidia stock will go down. Here’s how to keep it from hurting your portfolio
• Where will Nvidia stock be in 10 years?

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Advanced Micro Devices, Amazon, Apple, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Intel and has recommended the following options: long January 2025 $45 calls on Intel, long January 2026 $395 calls on Microsoft, short August 2024 $35 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Advanced Micro Devices, Amazon, Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX 200 Index (ASX: XJO) coal stocks could be set for more outperformance, as a dearth of wind Down Under led to a resurgence in coal-fired power in the June quarter.

While the coal miners are putting in a mixed performance today, they’ve broadly been a tear over the past year.

What kind of a tear?

Well, over the past 12 months, the ASX 200 has gained 11.3%.

Here’s how these ASX 200 coal stocks have performed over this same period (excluding some very juicy dividend payouts):

• New Hope Corp Ltd (ASX: NHC) shares are up 5.4%
• Whitehaven Coal Ltd (ASX: WHC) shares are up 35.5%
• Stanmore Resources Ltd (ASX: SMR) shares are up 59.3%
• Yancoal Australia Ltd (ASX: YAL)* shares are up 54.9%

(*Note: Yancoal is not an ASX 200 coal stock just yet. But with its market cap now at $9.7 billion, compared to $3.5 billion for Stanmore, I expect it will join the benchmark index in an upcoming quarterly rebalance.)

More turbines, less wind power

Despite the construction of more windmills, the June quarter saw a big decline in wind-driven electricity delivered to the Aussie market.

According to UNSW senior research associate Dylan McConnell (courtesy of The Australian Financial Review), wind power generation across the National Electricity Market (NEM) plunged 19.8% over the quarter just past.

But in good news for ASX 200 coal stocks, if not for Australia’s net zero ambitions, coal power went the other way, up 6.5%.

Commenting on the uptick in coal-fired electricity, Global Power Energy’s Geoff Eldridge said:

Coal and gas outputs have generally increased, reflecting a continued reliance on traditional energy sources to maintain grid reliability. Meanwhile, renewable energy sources such as utility wind and utility solar have faced declines due to seasonal challenges.

Independent consultant Matthew Rennie added, “Renewables are neither being built as quickly as we need them to be nor is transmission being constructed as quickly as required.”

What are the experts saying about ASX 200 coal stocks?

With renewable sources lagging in the race to provide reliable baseload power in Australia and much of the developing world continuing to roll out new coal-fired power plants, the demand picture for thermal coal remains solid over the medium term.

ASX 200 coal stocks are also likely to see strong ongoing demand for the higher-quality coking or metallurgical coal they dig from the ground.

In fact, Morgan Stanley lists metallurgical coal as its top commodity pick. According to the AFR, the broker forecasts coking coal prices will hit US$290 per tonne by the end of 2024, up 15% from current levels.

That bullish forecast is based on an expected rebound in demand from India, the world’s most populous nation. However, supply disruptions have also occurred, as several major coal mines — including Anglo American‘s (LSE: AAL) Grosvenor metallurgical coal mine in Queensland — have been shuttered following underground fires.

Morgan Stanley has an overweight rating on Yancoal and Whitehaven shares.

Glenmore Asset Management portfolio manager Robert Gregory is also bullish on the outlook for ASX 200 coal stocks and some of the smaller miners.

According to Gregory:

The really attractive part about all these coal stocks is that even at a reasonably low point in the price cycle, they’re still generating very material profits and paying dividends.

So the set-up is really positive in that when we get a recovery in coal prices, which I think is inevitable at some stage, then they’re poised to produce some very good earnings and hopefully get a re-rating as well.

The post ASX 200 coal stocks in focus as wind power fades to a breeze appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.