Stocks in Play - November 21st 2024

TLDR Stocks in Play: SNOW, PANW, NVDA, CRYPTO

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Irish Born Investor
November 21, 2024 • Estimated Reading Time: 6 minutes

Stocks in Play - November 21st 2024

TLDR Stocks in Play: SNOW, PANW, NVDA, CRYPTO

Welcome to today's Stocks in Play report. Below are the key stocks to watch, along with brief Xray and Analysis.

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1) Snowflake Inc. (SNOW)

Industry Group: Packaged Software, Market Cap: $43b, Float: 309m, Short Interest: 3.8%, Days to Cover: 1.8, Exchange: NYSE

Catalyst: Solid Beat on Revs & EPS. Large Operating Margins Beat (6% vs est. 3%), Big RPO (Remaining Performance Obligation) Beat (5.7b vs $5.2b). This is a big KPI and was way ahead of estimates. Modest Guide Higher on Revs for next Q & FY (29% YoY Growth), Strong Guide higher on Operating Margins. Snow management have been heavily criticized for their lack of performance since IPO and the stock performance reflects that. With that sentiment and expectation in mind this is a very strong report. They signed a deal with Anthropic to Bring Claude Models to AI Cloud and announced the acquisition of Datavolo a Data Management company for Enterprise AI. I’ve seen two positive Upgrades this morning so far from Needham & Piper Sandler.

2) Palo Alto Networks Inc. (PANW)

Industry Group: Packaged Software, Market Cap: $128b, Float: 320m, Short Interest: 3%, Days to Cover: 4.3, Exchange: NASDAQ

Catalyst: Muted Stock reaction last night on this Solid report. Beat on Revs, Beat on ARR, Beat on RPO, Beat on EPS. Raised Full Year guide for Revs + ARR, EPS. The negative was next Quarter only being inline in terms of guidance. The stock reacted -5% last night but and is now sitting at -2% this morning. I will be watching this for more of a reaction today after the news is fully digested. This is a highly owned institutional stock and nothing in this report will give them pause for thought.

3) NVIDIA Corporation (NVDA)

Industry Group: Semiconductors, Market Cap: $3T, Float: 23.55b, Short Interest: 1%, Days to Cover: 1, Exchange: NASDAQ

Catalyst: Another strong report from NVDA. Nothing overly surprising. Beat on Revs (94% YoY), Beat on EPS ($0.81 vs est. $0.75). Segments were all strong with Data Center YoY at 112%, Guidance was reiterated and in line. Huang batted away the Blackwell Chip overheating reports. I thought that analysts were relatively negative on the call regarding supply constraints into 25/26 and temporary Gross Margin pressure as Blackwell is launched. The market reaction was muted but I expect the sector to move today. Huang actually name checked some of their partners on the earnings call, transcript posted below. These could be worth monitoring if the sector moves. I expect NVDA to rally.

And so almost every company in the world seems to be involved in our supply chain. And we've got great partners, everybody from, of course, TSMC and Amphenol, the connector company, incredible company. Vertiv and SK Hynix and Micron, [ Spill ], Amkor, KYEC, and there's Foxconn and the factories that they've built and Quanta and Wiwynn and, gosh, Dell and HP, and Super Micro, Lenovo and the number of companies is just really quite incredible, Quanta. And I'm sure I've missed partners that are involved in the ramping of Blackwell, which I really appreciate. And so anyways, I think we're in great shape with respect to the Blackwell ramp at this point.

Jensen Huang, NVDA CEO

Honorable Mention to: CRYPTO - We are entering the phase of Crypto, and specifically MSTR, where everyone is melting down to try and pick the top. We had this exact situation with NVDA and it just went higher and higher. We are also seeing lot of scammy companies now adopt Bitcoin to their Balance Sheet in order to emulate Michael Saylor (TRNR this morning). The trend shows no sign of relenting and even if there is a drawdown in MSTR, Bitcoin is showing no sign of topping. I would continue to play these stocks and not get sucked into the Twitter geniuses trying to short the trend. Money will begin to cascade down into the more speculative and volatile plays.

Market Awareness

VIX was rising yesterday making it a choppy day all round. It looks like we will open the flat on the main indices with the Russell performing that bit better pre market. Potential still there for difficult intraday pulls with Russia tensions and Trump comments/cabinet picks. Bitcoin is the big theme right now. It’s just constant, the market is highly speculative right now. Worth noting we will be heading into Thanksgiving week next week, which is usually a low volume and choppy week. One I tend to avoid trading. My thinking is we have a strong finish to the week unless there is a big news catalyst.

After Hours I’m Watching: CPRT, ESTC, ROST, INTU (Earnings)

Sources & Services I Use in my Trading:

PS: There are many ways to trade stocks in play. It does not have to be the one that keeps going straight up and sometimes it doesn’t even have to be day one of the catalyst. Everyone must find a setup, timeframe and method that works for them. This list is supposed to educate on the criteria I use and the methods in which I find Stocks in Play. Yours may differ and that is completely okay.

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