Nasdaq soars to lead stocks higher, Nvidia spurs AI hopes

Live2 updates

• Mon, March 18, 2024 at 5:30 PM GMT+5:30

  Remember FAANG component Netflix?

  With investors obsessed with Nvidia (NVDA) and the Magnificent 7, they may have forgotten about their former favorite — FAANG (a refresher on FAANG) component Netflix (NFLX).

  Not everyone has forgotten about the streaming beast: the stock is up 23% since its fourth quarter earnings report!

  I liked a couple of the call outs from JP Morgan analyst Doug Anmuth in a new note this morning.

  First was his reasoning behind staying bullish on Netflix shares.

  “We remain positive on Netflix shares and our bull thesis remains: 1) accelerating revenue growth in 2024 led by healthy organic growth, paid sharing, and price increases; 2) steady operating margin expansion balanced with growth investments across content, advertising, and gaming; 3) multi-year free cash flow ramp on improving profit and cash content discipline; 4) Netflix’s strong streaming leadership position; and 5) potential to become global TV as Netflix expands its 260 million member base across the 500 million plus global CTV households ex-Russia & China. We believe Netflix’s large scale, strong engagement (around 2 hours/day), and diversified content will continue to push the platform toward becoming global TV over time — i.e., the default choice for where users will consume long-form video content.”

  And then his brief analysis on the upcoming Mike Tyson vs. Jake Paul fight on Netflix:

  “Netflix continues to build out its sports content, primarily targeting sports entertainment and shoulder programming. Key examples include WWE Raw, Formula 1: Drive to Survive, Full Swing, Break Point, Quarterback, Tour de France: Unchained, The Netflix Slam, etc. Importantly, Netflix is partnering with Most Valuable Promotions (MVP) to stream its third live sports event ever, a heavyweight boxing mega-event headlined by Jake Paul and Mike Tyson on July 20. We believe the fight could be the most watched boxing match ever given ease of access and NFLX’s large global subscriber base, and it should attract meaningful ad dollars while also boosting a seasonally slower period in mid-summer. While Netflix’s current focus is sports entertainment and shoulder content, we do not rule out a bigger push into live sports over time.”

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  Mon, March 18, 2024 at 5:00 PM GMT+5:30

  How Nvidia is seen by investors could change again this week

  Ask most holders of Nvidia’s (NVDA) stock what the company does and they will probably say “chipmaker.”

  But that definition may change this week after Nvidia’s GTC conference, which starts today. And it has to change if Nvidia’s market cap is to continue to expand beyond its eye-popping $2.2 trillion level seen today.

  Good point on this front from Stifel’s tech analyst Ruben Roy:

  “While we think that it has become evident that Nvidia is no longer a “chip” company, the company’s hardware innovations, roadmap, and time-to-market expectations are critically important given the emergence of several layers of potential competition including AMD (AMD) GPU platforms, various AI accelerator alternatives and accelerating efforts from most large CSPs to develop captive AI silicon. Given recent press reports, we would expect Nvidia to address the potential for further diversification of its technology road-map with potential custom application specific silicon offerings. On this front, while we think that this sort of technology expansion would make sense, we would view this as a long-term strategic effort given the time and investment required to develop an ASIC business.”

  Coverage Reminder

  Yahoo Finance’s resident Nvidia expert — tech editor Dan Howley – is stationed at GTC. Be sure to follow his reporting on our platform and on X @DanielHowley. Give his GTC preview a read here.