Category: Stock Market

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

It’s impossible to ignore the effect artificial intelligence (AI) has had on the technology landscape over the past year or so, and Nvidia (NASDAQ: NVDA) has been the standard bearer. The company’s chips are at the heart of the AI revolution, providing the computational horsepower that makes it all possible. This, in turn, has sent the stock soaring, up 215% over the past year. These gains led to Nvidia’s high-profile 10-for-1 stock split, which was completed just last week.

After the stock’s epic run to a $3 trillion market cap, Wall Street is reevaluating Nvidia’s future prospects. There’s a new price target from one analyst that should be of particular interest to shareholders.

 Next stop: $5 trillion?

Rosenblatt Securities analyst Hans Mosesmann reiterated his buy rating on Nvidia stock and increased his price to $200. That represents potential upside for investors of 53% compared to Monday’s closing price, and would push Nvidia’s market cap within striking distance of $5 trillion. One aspect of Nvidia’s business that’s being overlooked by investors is the software side. “The real narrative lies in the software that complements all the hardware goodness,” the analyst wrote.

He went on to suggest that demand for software will increase over the course of “the next decade in terms of overall sales mix.”

I think the analyst hit the nail on the head. Nvidia’s edge lies not only in the hardware but also in the associated software that helps provide peak performance. Cathie Wood of Ark Invest estimates that the total addressable market for AI software could be worth $13 trillion by 2030, helping illustrate the magnitude of the opportunity ahead.

Furthermore, Nvidia will begin shipping its next-generation Blackwell processors later this year, which will cement the company’s increasing lead in the AI chip space.

Nvidia’s stock is currently selling for 51 times forward earnings. While that’s a premium valuation, it’s an attractive price for a stock that has generated gains of 27,450% over the past 10 years.

There’s a long runway ahead, which is why Nvidia stock is a buy.

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

The post Is Nvidia stock going to $200 in the wake of its 10-for-1 stock split? appeared first on The Motley Fool Australia.

More reading

• Can anyone topple Nvidia as the king of artificial intelligence investments?
• We see patterns everywhere. That’s not always helpful.
• Nvidia shares reach world’s most valuable milestone. Where to now?
• Is it too late to buy Nvidia stock?
• Insiders are selling Nvidia stock. Should you?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia. Danny Vena has positions in Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Owners of Woodside Energy Group Ltd (ASX: WDS) shares may like to know how much their company has contributed to Australia’s finances.

As a major commodity business, Woodside is obliged to pay taxes and royalties to state and national governments. Woodside chief financial officer Graham Tiver had this to say:

We are steadfast in our belief that governments and local communities should receive a fair return for the finite resources we extract. A balanced appreciation of this protects energy security and local jobs, as well as encouraging the future investment required to support the energy transition.

We believe in paying tax where value is created and applying arm’s length principles to our international related party dealings. We do not support the use of artificial arrangements or the transfer of value to low tax or so-called tax haven jurisdictions.

Australian government payments

Woodside’s total payments to governments around the world totalled US$3.7 billion in 2023, which was a record for Woodside. This was mostly driven by “earlier commodity price highs”, which also helped propel the Woodside share price above $38.

The ASX oil and gas share is one of the largest taxpayers in Australia. This is where its headquarters and the majority of its core producing assets are located.

In Australia, it paid a total of US$3.25 billion to governments. Of that total, Woodside paid $2.91 billion to the Australian Taxation Office, and $325 million was paid in royalties, split between the WA state government and the federal government. It also paid $12 million in various fees to different Australian departments and authorities.

Woodside noted the company expected its growth projects to “support energy security and prosperity for decades to come”. For example, the energy share expects its Scarborough energy project in Western Australia to generate “tens of billions of dollars in Australian taxes and thousands of local jobs”.

Payments to other countries

The rest of the world received close to US$500 million in payments from Woodside.

The company paid the United States US$350.3 million, Trinidad and Tobago US$135.5 million, and Mexico US$3.6 million. Canada received US$0.4 million, and Timor-Leste US$0.3 million.

Woodside share price snapshot

Since the start of 2024, the Woodside share price has fallen by 13.29%. The S&P/ASX 200 Index (ASX: XJO) has lifted almost 2% in 2024 so far, meaning the company has significantly underperformed the index.

The post Own Woodside shares? Here’s how much your company paid in Aussie taxes in 2023 appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday
• These ASX 200 mining stocks could rise 30% to 60%
• 5 things to watch on the ASX 200 on Monday
• Tax-busters: 5 fully-franked ASX dividend shares I’d buy for FY25

Motley Fool contributor Tristan Harrison 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.

There are plenty of ASX dividend shares out there for investors to choose from, but which ones could be in the buy zone right now?

Three that analysts have recently named as buys are listed below. Here’s what they are saying about them and the dividend yields they are forecasting in the near term:

Endeavour Group Ltd (ASX: EDV)

Goldman Sachs thinks that Endeavour Group could be a great ASX dividend share to buy. It is the leading company in alcohol retail and the owner of BWS and Dan Murphy’s.

The broker likes its market leadership position and the defensive nature of the alcohol retail market.

As for dividends, Goldman is forecasting fully franked dividends of approximately 22 cents per share in both FY 2024 and FY 2025. Based on the current Endeavour share price of $5.08, this will mean dividend yields of 4.3% for both years.

Another positive is that the broker sees plenty of upside for its shares at current levels. It currently has a buy rating and $6.20 price target on them.

Inghams Group Ltd (ASX: ING)

Analysts at Morgans think that Inghams could be an ASX dividend share to buy. It is Australia’s leading poultry producer and supplier.

The broker is feeling bullish on the company due to its market leadership position, favourable consumer trends, and valuation. It has described Ingham’s shares as “undervalued” at current levels.

Morgans is also expecting some good dividend yields in the near term. It is forecasting fully franked dividends of 22 cents per share in FY 2024 and then 23 cents per share in FY 2025. Based on the current Inghams share price of $3.55, this equates to dividend yields of 6.2% and 6.5%, respectively.

Morgans has an add rating and $4.40 price target on its shares.

Suncorp Group Ltd (ASX: SUN)

Over at Goldman Sachs, its analysts also think that Suncorp could be a top ASX dividend share to buy. It is one of Australia’s largest insurance companies.

Goldman believes that Suncorp is well-placed to benefit from tailwinds in the general insurance market.

The broker expects this to support the payment of fully franked dividends per share of 78 cents in FY 2024 and then 83 cents in FY 2025. Based on the current Suncorp share price of $16.51, this will mean dividend yields of 4.7% and 5%, respectively.

Goldman has a buy rating and $17.54 price target on the company’s shares.

The post 3 excellent ASX dividend shares to buy now appeared first on The Motley Fool Australia.

More reading

• Where Aussies are spending their money, and the ASX shares that could benefit
• Brokers name 3 ASX dividend shares to buy
• Buy and hold these ASX dividend shares until 2034
• 4 ASX income stocks with big dividend yields to buy now
• Forget Westpac shares and buy these ASX income stocks

Motley Fool contributor James Mickleboro has positions in Endeavour Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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.

I agree that Pro Medicus Ltd (ASX: PME) shares are expensive, trading at a triple-digit earning multiple.

In an ideal world of investing, we all want to find high-quality companies trading at cheap multiples. But with so many eyes on the same pool of companies, it’s often easier said than done.

If I had to choose between a cheap, mediocre company and a great growth company trading at high valuation multiples, I’d always go for the latter.

As Charlie Munger — the late business partner of Warren Buffett — said, it’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Investing in these high-quality companies can pay off in the long run, even if it means paying a premium today.

Excellent business model

Pro Medicus provides advanced medical imaging software and services globally, especially doing well in the United States.

When you visit a doctor for issues like bone fractures or persistent headaches, there’s a good chance you’ll need medical imaging for an accurate diagnosis. Post-pandemic medical imaging has swiftly transitioned to digital methods, eliminating the need to carry physical X-ray or ultrasound films.

This digital shift enhances efficiency and accessibility, underscoring the importance of companies like Pro Medicus in modern healthcare.

Pro Medicus generates revenue from subscription fees as well as a small fee charged per each medical imaging done on its platform. To be specific, the revenue is based on a software-as-a-service model using transaction minimums. And there’s further upside as client examination volumes grow over time. This is a great scalability.

In 1H FY24, its revenue grew 30% to $74.1 million, with an operating margin of 66%. Its net profit after tax was up 33% to $36.3 million.

The company is debt-free due to its strong operating cash flows and requires little capital investment to operate.

It ticks other investment considerations like a high insider ownership of approximately 52% and a high return on investment of 50%.

Expensive, for now

The Pro Medicus shares aren’t cheap however you cut it. Using estimates by S&P Capital IQ, the shares are trading at:

• Price-to-earnings (P/E) multiple of 175x on FY24 earnings estimates
• P/E ratio of 134x on FY25 earnings estimates
• P/E ratio of 105x on FY26 earnings estimates
• Enterprise value to revenue multiple of 67x on FY25 estimates
• Free cash flow yield of 0.5%
• Dividend yield of 0.26%

But as you might have noticed, these earnings multiples rapidly reduce as we go out by a year. This is because of its healthy earnings growth.

Should we wait for a better entry point?

The Pro Medicus share price has nearly doubled in the past year, currently trading at $134.5. This might make you wonder if it’s better to wait for the share price to weaken before investing.

I’m not completely against this idea, as events like another pandemic or economic downturns can impact the share market. The trouble is that it’s impossible to predict when they might happen, so they often surprise the market.

Rather than waiting for the ideal moment, starting with a small investment now and gradually increasing it could be more beneficial in the long run, as any current price changes might appear minor in hindsight.

The post Bull market buys: 1 magnificent ASX stock to own for the long run appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 3 ASX healthcare shares smashing new 52-week highs today
• 2 top ASX growth shares to buy today and hold for 10 years
• 3 reasons to be positive on ASX 200 shares in FY25 (and 3 to be wary)
• Top ASX AI stocks to buy in June 2024

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 positions in and has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Wednesday, the S&P/ASX 200 Index (ASX: XJO) had a subdued session and edged lower. The benchmark index fell 0.1% to 7,769.7 points.

Will the market be able to bounce back from this on Thursday? Here are five things to watch:

ASX 200 expected to fall again

The Australian share market looks set to fall again on Thursday despite a positive night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 21 points or 0.3% lower this morning. In the United States, the Dow Jones was up 0.15%, the S&P 500 rose 0.25% and the Nasdaq edged higher. The S&P 500 closed at a new record high overnight.

Oil prices soften

ASX 200 energy shares including Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a subdued session after oil prices softened overnight. According to Bloomberg, the WTI crude oil price is down 0.1% to US$81.47 a barrel and the Brent crude oil price is down 0.1% to US$85.27 a barrel. Traders may have been taking profit after oil prices hit a seven-week high.

Buy QBE shares

QBE Insurance Group Ltd (ASX: QBE) shares are good value according to analysts at Goldman Sachs. In response to its half-year trading update and North American strategic review, the broker has reiterated its buy rating with a trimmed price target of $20.60. The broker commented: “North America de-risking positive but New Caledonia eliminates CAT buffer.”

Gold price falls

It could be a soft session for ASX 200 gold miners such as Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) today after the gold price edged lower overnight. According to CNBC, the spot gold price is down 0.2% to US$2,342.7 an ounce. This appears to have also been driven by profit taking.

Helia rated neutral

The Helia Group Ltd (ASX: HLI) share price crashed 20% yesterday amid news that Commonwealth Bank of Australia (ASX: CBA) intends to issue a request for proposal relating to its external Lenders Mortgage Insurance (LMI) requirements for the whole CBA group. This sparked fears that Helia could lose a contract that represented approximately 53% of its gross written premium in FY 2023. Goldman Sachs has responded by holding firm with its neutral rating and $4.53 price target. It said: “Importantly, our discussion with the company today has left us confident that, to the extent it was to lose the CBA contract, it should be able to distribute the resulting capital release.”

The post 5 things to watch on the ASX 200 on Thursday appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• How central banks are primed to drive a new ASX 200 gold stock rally
• Here’s why ASX uranium shares like Deep Yellow are running hot today
• Top brokers name 3 ASX shares to buy today
• Why Beach Energy, Core Lithium, Helia, and Red 5 shares are dropping today

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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.

ASX-listed exchange-traded funds (ETFs) can provide Aussie investors with exposure or strategic allocation to sectors and companies that their portfolios may lack.

Many Aussies may be shareholders in the largest individual stocks of BHP Group Holdings Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Ltd (ASX: CSL), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), and ANZ Group Holdings Ltd (ASX: ANZ).

Plenty of other Aussies may have investments in ETFs like Vanguard Australian Shares Index ETF (ASX: VAS), SPDR S&P/ASX 200 ETF (ASX: STW), iShares Core S&P/ASX 200 ETF (ASX: IOZ) and BetaShares Australia 200 ETF (ASX: A200). These ETFs provide the same heavy weighting as those large ASX blue-chip shares I mentioned above.

I believe Aussies would benefit by investing in ASX ETFs that provide exposure to quality businesses from different sectors, listed in different countries. That’s why I like the below two options.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

The idea of this fund is to invest in competitively advantaged US companies at good prices.

It only considers businesses with an economic moat that are expected almost certainly to endure for the next decade and more. Competitive advantages can come in many forms, including cost advantages, brand power, patents, switching costs, network effects, etc.

With a shortlist of these quality US businesses, the Morningstar analyst team only buys shares when they believe a stock is trading at an attractively below-fair price for that company.

Past performance shouldn’t be viewed as a reliable indicator of future performance, but over the past five years, the MOAT ETF has returned an average of 16.2% per annum.

At the moment, the portfolio has three holdings with a weighting of more than 3%: Teradyne, Alphabet, and International Flavors & Fragrances.

VanEck MSCI International Quality ETF (ASX: QUAL)

There are a number of ways to create a quality international portfolio. This ASX ETF applies a number of quality scores based on different financial metrics, leading to a group of high performers with a strong combined score.

To make it into this portfolio of 300 holdings, businesses must have a high return on equity (ROE), earnings stability and low financial leverage. This means that these companies typically do not experience drops in profits. They are able to generate substantial profits relative to the amount of shareholder money (equity) invested in the business and maintain low levels of debt.

These are the businesses inside the portfolio with a weighting of at least 2%: Nvidia, Apple, Microsoft, Meta Platforms, Alphabet, Eli Lilly, Novo Nordisk, ASML and Visa.

Over the past five years the QUAL ETF has returned an average return per annum of 17.6%, though this shouldn’t be relied upon to predict future returns.

The post 2 of my favourite ASX ETFs for Australian investors appeared first on The Motley Fool Australia.

More reading

• Why these strong ASX ETFs could be top long term picks
• Records tumble! Hot ASX ETFs smash all-time highs again on Friday
• 16% per annum: What is the VanEck Wide Moat ETF’s secret sauce?
• Looking for ASX growth shares? I rate these 2 as buys
• 3 popular ASX ETFs smashing record highs today

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison 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 ASML, Alphabet, Apple, CSL, Meta Platforms, Microsoft, Nvidia, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Novo Nordisk and Teradyne and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended ASML, Alphabet, Apple, CSL, Meta Platforms, Microsoft, Nvidia, and VanEck Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Today is a historic day for Aussie cryptocurrency investors. Bitcoin (CRYPTO: BTC) will be available via the ASX for the first time as the Australian Securities Exchange welcomes the VanEck Bitcoin ETF (ASX: VBTC) to its bourse.

Other exchange-traded fund (ETF) providers have launched Bitcoin ETFs in Australia before. In May 2022, Global X Management — in partnership with 21Shares — opened the door to its Bitcoin ETF on Cboe Australia (formerly known as Chi-X).

However, today’s milestone marks the first of its kind for the largest stock exchange in Australia.

The original cryptocurrency is up 143% over the last year, fetching US$65,453 for one Bitcoin. Investors pushed the price higher in anticipation of its fourth ‘halving’ in April this year, reducing its further supply by 50%.

Breaking Bitcoin barriers with ASX debut

According to the 2024 Finder Consumer Cryptocurrency Report, approximately a quarter of Australians have owned or are interested in owning crypto. However, obtaining it can prove difficult for some.

VanEck Australia aims to make the journey to investing in Bitcoin easier by making the cryptocurrency available through a traditional financial product. Being an ASX-listed ETF is another important facet of the launch.

Through its own research, the asset manager discovered that 33% of surveyed advisers would include a Bitcoin ETF in their portfolios for clients if it were available on the ASX.

In describing the appeal of the spot Bitcoin ETF, VanEck Asia Pacific CEO Arian Neiron explained:

VBTC also makes Bitcoin more accessible by managing all the back-end complexity. Understanding the technical aspects of acquiring, storing and securing digital assets is no longer necessary.

Moreover, the new crypto investment option is being marketed as ‘the most cost-effective Bitcoin fund exposure in Australia’. VanEck’s product disclosure statement outlines an annual management fee of 0.59%. The Global X Bitcoin ETF carries a 1.25% management fee for comparison.

What is a ‘spot’ Bitcoin ETF?

The term ‘spot’ is derived from the spot price of an asset. In other words, spot Bitcoin ETFs give the investor exposure to the underlying value of Bitcoin at market prices. Meanwhile, other ‘non-spot’ Bitcoin ETFs can use derivatives, such as futures contracts, to mimic the underlying asset’s returns.

VanEck is not alone in its pursuit of bringing Bitcoin to the ASX.

Reportedly, DigitalX Ltd (ASX: DCC) is hot on the heels of VanEck. The alternative wholesale fund manager is also evaluating an ASX-listed spot Ether ETF down the track.

The post Bitcoin ETF hits the ASX. Here’s what you need to know appeared first on The Motley Fool Australia.

More reading

• Can anyone topple Nvidia as the king of artificial intelligence investments?
• Here are the top 10 ASX 200 shares today
• We see patterns everywhere. That’s not always helpful.
• It’s only a day until ASX investors can buy Guzman y Gomez shares
• 3 ASX healthcare shares smashing new 52-week highs today

Motley Fool contributor Mitchell Lawler has positions in Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia has positions in and has recommended Bitcoin and Ethereum. 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.

You would be hard-pressed to find an investor who doesn’t consider Nvidia (NASDAQ: NVDA) the pinnacle of artificial intelligence (AI) companies. Its graphics processing units (GPUs), which crunch AI workloads, are best in class by a wide margin and have been used by practically every company interested in AI. 

But are there any companies that could dethrone Nvidia?

Nvidia’s direct competitors aren’t even close

Part of the fear of investing in Nvidia is wondering what will happen if and when the music stops. Right now, the company is firing on all cylinders. But the question remains: What happens when enough GPUs have been purchased to satisfy AI demand?

There are some factors influencing the answer to that question, such as the average lifespan of a GPU used for server computing. That is estimated to be around three to five years, which would mean there will be a replacement cycle. But if the demand for Nvidia GPUs is met, then the next round of AI technology might look somewhat different.

If that happens, which company could take the spot atop the AI mountain? Some might point to Advanced Micro Devices as a potential successor. AMD competes directly with Nvidia in the data center GPU space but has been getting smoked.

However, AMD has recently generated momentum with various cloud-computing providers starting to add its GPUs as an alternative. They don’t want to be devoted solely to Nvidia hardware because that would give it too much pricing power over them. But because Nvidia still has much better technology, AMD will likely only be considered as an alternative.

Another candidate is Taiwan Semiconductor, (TSMC for short), the chip foundry that supplies Nvidia and thereby makes its products possible. But TSMC also supplies chips to AMD and other companies, which makes it a neutral factor in the AI investment race.

Besides, TSMC expects massive growth driven by AI demand over the next few years. In its latest conference call, management said, “For the next five years, we forecast [AI revenue] to grow at 50% [compound annual growth rate] and increase to higher than 20% of our revenue by 2028.” That’s strong growth, but it also means Nvidia could continue its dominance since it’s a key customer for TSMC.

The companies applying AI depend on Nvidia

But all of the above is just the hardware side; what about application and use?

Microsoft and Alphabet are both massive customers for Nvidia’s GPUs. Not only do they have internal uses for them, but they also buy them to power their respective cloud computing services.

They also started designing their own AI chips, so they don’t have to buy them from Nvidia. However, these chips are highly workload-specific, so general-purpose GPUs like Nvidia’s will still account for the lion’s share of computing power.

Software companies like Palantir are also bringing AI capabilities to the masses. Its clients still need plenty of computing power to run its models, and it gives them the tools to create them. This could make the company a potential successor to Nvidia as a leading AI investment, since it will continue to see demand for its platform long after AI computing capacity is built out.

But all roads lead back to Nvidia, which is why it has been and will continue to be the most popular AI investment. Nvidia is on top of the AI world right now, and there currently doesn’t appear to be any company that can dethrone it. 

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

The post Can anyone topple Nvidia as the king of artificial intelligence investments? appeared first on The Motley Fool Australia.

More reading

• We see patterns everywhere. That’s not always helpful.
• Nvidia shares reach world’s most valuable milestone. Where to now?
• Is it too late to buy Nvidia stock?
• Insiders are selling Nvidia stock. Should you?
• Nvidia jumped 27% after its stock split announcement. Can Broadcom beat it?

 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in Alphabet and Taiwan Semiconductor Manufacturing. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Advanced Micro Devices, Alphabet, Microsoft, Nvidia, Palantir Technologies, and Taiwan Semiconductor Manufacturing. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Advanced Micro Devices, Alphabet, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

More reading

• 3 ASX healthcare shares smashing new 52-week highs today
• Here’s why ASX uranium shares like Deep Yellow are running hot today
• Here’s why the Treasury Wine share price is beating the ASX 200 today
• These four ASX All Ords shares just earned hefty broker upgrades. Here’s why
• Is the slashed Sonic Healthcare share price a ‘buying opportunity’?

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 positions in and has recommended Light & Wonder, Pro Medicus, and Telix Pharmaceuticals. The Motley Fool Australia has recommended Light & Wonder, Pro Medicus, Telix Pharmaceuticals, and Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Well, there’s been a bit going on this week… and it’s only Wednesday.

We’ve had an interest rate decision, a new ‘largest company’ in the US, and the unveiling of a new energy policy from the federal Coalition.

No, I’m not going to wade into the climate/energy wars. At least not here and now (though I have a fascinating episode of our podcast, The Good Oil, coming out on that… Subscribe to the podcast feed here so you don’t miss it!).

But I do want to address the other two. Let’s do it in reverse order.

Computer chip company, Nvidia, became the new king: the largest US company, measured by market capitalisation (the total value of all of its shares). Its value hit $5 trillion overnight, now leading Microsoft and Apple.

If you haven’t been following the story, Nvidia’s chips are in hot, hot, demand as the chip du jour to power artificial intelligence. Sales and profits are going through the roof.

So… is the company’s share price.

In fact, get this: in the last 5 years, the share price has gone from US$3.79 to US$135.58 – that’s a 35-fold increase in half a decade.

But also, get this: America’s most valuable company has a price-earnings ratio of… 80 times.

Now, the average across the market usually runs between 15 and 20 times. So 80 is… a lot. A lot of future growth from a company that’s already the largest one in the US!

Which doesn’t mean, for a second, that it can’t happen. People said Amazon was overpriced at 1% of the current share price (I own shares, for the record, but I bought much later than that!). People said Apple’s run was done more than 50% ago.

So, I’m not writing off Nvidia’s chances. Just… flagging that a lot is expected of a company whose shares are already at the top of the heap.

And so to interest rates.

Well, not the rates themselves – we know they’ve been kept on hold. But the commentary that came with it. Foremost was the strongest words yet from a Reserve Bank Governor, to the effect that Federal and State Treasurers are adding stimulus to the economy at the very time the RBA is desperately trying to cool it down.

And, as we all know, there are income tax cuts and energy rebates to come, federally, Queensland’s government is throwing an extraordinary amount of money around, and NSW has announced new spending.

Which… makes for a very difficult environment for the Australian economy, with plenty of people doing it very tough, and a lot who are doing very nicely.

No, I don’t have a magic wand, or a simple answer. But I do know that when the RBA has its foot on the brake while governments have theirs on the accelerator, something isn’t working.

And, ideology aside, I think it’s likely that electoral temptations are overwhelming the better advice for governments to do more to cool the economy, using the scores of tools at their disposal. They should do the right thing… not the popular thing.

Why, you ask, am I mentioning all of this?

Well, in part because the more things change, the more they stay the same: there’s always something to worry about, some clouds on the horizon, and some company that’s supposed to be the next big thing (or already is, and is going to get bigger).

But in part because there are false positives (apparent correlations that really aren’t) and false negatives (the reverse) all the time. Is Nvida going to prove the doubters wrong, a la Amazon, or be more like Cisco, the dot.com darling that is still 40% below its all-time high, set back in early 2000? Will rates keep rising? Fall? Will we have or avoid a recession?

I’ve lost track of the number of times people tell me that ‘It’s just like back in…’, or ‘This is just like [Company X]’.

Sometimes, of course, it is. But sometimes it’s not.

As investors, we need to be very, very careful of noticing an historical similarity, and assuming it’ll be instructive… or that it won’t.

Which you know is logically true. And yet… we humans are pattern-seeking machines. It’s an enormous evolutionary advantage, but it can mislead us when it comes to our portfolios.

What happens next, for Nvidia, and for rates?

I have no idea. Nor do you. (And if you think you know for sure, can I suggest you allow for a little more uncertainty?)

What I do know is that long term compound returns have been earned through, and in, all sorts of markets, with all sorts of headlines and all sorts of fears. There have been all sorts of companies at the top of the market-cap pops.

And I’ll make one fearless prediction – that reality will be with us for as long as there are sharemarkets!

We might as well make our peace with it, invest regularly, prepare for volatility, and keep our eyes on the long term.

Fool on!

The post We see patterns everywhere. That’s not always helpful. appeared first on The Motley Fool Australia.

More reading

• Nvidia shares reach world’s most valuable milestone. Where to now?
• Is it too late to buy Nvidia stock?
• Insiders are selling Nvidia stock. Should you?
• Nvidia jumped 27% after its stock split announcement. Can Broadcom beat it?
• 3 reasons to buy Nvidia like there’s no tomorrow (Hint: The stock split Isn’t 1 of them)

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Scott Phillips has positions in Amazon and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, Cisco Systems, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended 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.