AndreyPopov/iStock via Getty Images FINRA margin ratio and passive trading in focus As all major equity indices (including DJI , SP500 , NASDAQ , and RTY ) hover around record highs, their elevated valuation risks (such as those reflected in their heightened P/E ratios) dominate financial headlines more and more. I’ve shared my counterarguments against the simple use of P/E ratios (see this articl...
AndreyPopov/iStock via Getty Images FINRA margin ratio and passive trading in focus As all major equity indices (including DJI , SP500 , NASDAQ , and RTY ) hover around record highs, their elevated valuation risks (such as those reflected in their heightened P/E ratios) dominate financial headlines more and more. I’ve shared my counterarguments against the simple use of P/E ratios (see this article as an example) and urged investors to contextualize P/E ratios with profit margins, overseas market shares, risk-free rates, etc. Instead, I tend to be more concerned about the long-term and structural shifts within modern market mechanics. To me, these shifts create far more critical vulnerabilities for investors as they can outdate our past strategies no matter how successful they have been in the past. To become more dangerous and damaging, the shifts happen over a long period of time so that many of us can be unaware of the gradual changes and thus caught blindsided. Along this line of thought, the goal of this article is to share two trends, reflected in two numbers, which indicate to me such a gradual but structural shift: the FINRA margin ratio and the fraction of passive trading. I will explore the escalating risks brought about by structural leverage and systemic trend-following in today’s market. I will argue why and how these two trends, when combined, can cause and are causing the market to behave like a giant momentum or voting machine on steroids (at least in the near term) and create large volatilities. Of course, a diagnosis is not too useful without a prescription. Towards the end of the article, I will suggest a few ideas that investors can use to hedge against these escalating risks or even benefit from them. After all, every major shift features risks and opportunities at the same time. FINRA Margin ratio reaches 53% Let me start with the first number: the FINRA margin ratio as shown in the next screenshot. The screenshot was captured from MacroMicro ,...
At $459.97, Broadcom (NASDAQ:AVGO) looks attractively positioned for investors with a 12-month horizon. The stock just touched a 52-week high of $465.99 and sits on the doorstep of an earnings report that prediction markets are pricing as a near-certain beat, which makes the next 90 days a real test of the bull thesis. Broadcom designs ... Buy, Sell or Hold Broadcom Before Earnings Tomorrow?
At $459.97, Broadcom (NASDAQ:AVGO) looks attractively positioned for investors with a 12-month horizon. The stock just touched a 52-week high of $465.99 and sits on the doorstep of an earnings report that prediction markets are pricing as a near-certain beat, which makes the next 90 days a real test of the bull thesis. Broadcom designs ... Buy, Sell or Hold Broadcom Before Earnings Tomorrow?
Buy, Sell or Hold Broadcom Before Earnings Tomorrow? Yahoo Finance Broadcom Inc. (AVGO): One of the Premier Stocks to Buy Right Now According to AI Yahoo Finance Broadcom Reports Earnings Wednesday. Here's How Much Traders Expect the Stock to Move Investopedia Broadcom: Still A Buyer At 61x, But The Print Has To Be Flawless (NASDAQ:AVGO) Seeking Alpha Is Broadcom Stock a Buy Ahead of Its Q2 Earnin...
Buy, Sell or Hold Broadcom Before Earnings Tomorrow? Yahoo Finance Broadcom Inc. (AVGO): One of the Premier Stocks to Buy Right Now According to AI Yahoo Finance Broadcom Reports Earnings Wednesday. Here's How Much Traders Expect the Stock to Move Investopedia Broadcom: Still A Buyer At 61x, But The Print Has To Be Flawless (NASDAQ:AVGO) Seeking Alpha Is Broadcom Stock a Buy Ahead of Its Q2 Earnings Report After Market Close on Wednesday? The Motley Fool Here's Why We Think Broadcom (NASDAQ:AVGO) Might Deserve Your Attention Today Moomoo Key facts: Broadcom Q3 Jun 3; Anthropic pact; Photonics supplier, +30% TradingView AVGO Set to Report Q2 Earnings: Buy, Sell or Hold Broadcom Stock? Zacks Investment Research Oppenheimer sends clear message on Broadcom ahead of earnings thestreet.com
Getty Images It is looking pretty grim on the geopolitical front after Iranian negotiators ended communications with the US on grounds that Israel is not abiding by the ceasefire agreement struck by President Trump. In fact, attacks have only escalated with Prime Minister Netanyahu ordering troops to advance further into Lebanon. This is starting to undermine the narrative that a quick resolution ...
Getty Images It is looking pretty grim on the geopolitical front after Iranian negotiators ended communications with the US on grounds that Israel is not abiding by the ceasefire agreement struck by President Trump. In fact, attacks have only escalated with Prime Minister Netanyahu ordering troops to advance further into Lebanon. This is starting to undermine the narrative that a quick resolution to the conflict will lower energy prices and bring the rate of inflation back to pre-war levels this summer. WTI crude spiked more than $4 yesterday, closing above $92, while Treasury yields rose across the curve with the 10-year briefly creeping back above 4.5%. Finviz I have been less sanguine about a “deal” than the consensus, because I see no way that Iran will agree to President Trump’s terms, which amount to a complete capitation by the regime. Nor do I think the President will agree to a deal that gives Iran any concessions, which they demand and would raise questions about why we went to war in the first place. This is a quagmire, and I think President Trump is feeling the heat, which is why he asserted yesterday afternoon that talks with Iran were now continuing, and that Israel and Hezbollah had agreed to stop attacking each other. These claims were summarily dismissed by all parties involved, which has become par for the course. Bloomberg The President’s statements are obviously to jawbone stocks, bonds, and oil in a more favorable direction, but the weight of his rhetoric on the markets is starting to wane. Up to this point, investors have been willing to look the other way, because of the remarkable earnings season, but the season is over. We still have a lot of AI euphoria in the air, as well as the SpaceX IPO next week, but the tug-of-war between the AI investment cycle and geopolitical and macroeconomic headwinds is bound to intensify if the conflict does not end soon. When oil prices and interest rates do rise sharply investors buy the only sector that seem...
Ten thousand dollars in Direxion Daily Semiconductor Bull 3X Shares (NYSEARCA:SOXL) on May 27, 2025 was worth about $131,000 thirteen months later, and almost nobody you know actually held it the whole way. That is the punchline and the problem. The fund closed at $225.79 on May 26, 2026 against a $17.24 starting price on ... $10,000 in SOXL Became $131,000 in 13 Months, but Almost Nobody Held It
Ten thousand dollars in Direxion Daily Semiconductor Bull 3X Shares (NYSEARCA:SOXL) on May 27, 2025 was worth about $131,000 thirteen months later, and almost nobody you know actually held it the whole way. That is the punchline and the problem. The fund closed at $225.79 on May 26, 2026 against a $17.24 starting price on ... $10,000 in SOXL Became $131,000 in 13 Months, but Almost Nobody Held It
A screen of stocks with market capitalizations above $10B highlights some of the market’s most attractively valued companies relative to their sector peers. Notable names include Amcor ( AMCR ), Harmony Gold Mining ( HMY ), and International Paper ( IP ) , all of which carry solid valuation grades and appear attractively priced relative to their industry peers, making them noteworthy candidates fo...
A screen of stocks with market capitalizations above $10B highlights some of the market’s most attractively valued companies relative to their sector peers. Notable names include Amcor ( AMCR ), Harmony Gold Mining ( HMY ), and International Paper ( IP ) , all of which carry solid valuation grades and appear attractively priced relative to their industry peers, making them noteworthy candidates for value-oriented investors seeking opportunities in the materials sector. Seeking Alpha's valuation grade compares how expensive or cheap a stock is relative to others in its sector. It is based on a combination of valuation metrics such as P/E, PEG, EV/Sales, EV/EBITDA, EV/EBIT, Price/Sales, Price/Book, Price/Cash Flow, and dividend yield, using both current and forward estimates. Top undervalued materials stocks by valuation grade (market cap $10B and above): Amcor plc ( AMCR ): Valuation Grade A+ Harmony Gold Mining Company Limited ( HMY ): Valuation Grade A+ International Paper Company ( IP ): Valuation Grade A+ LyondellBasell Industries N.V. ( LYB ): Valuation Grade A+ Gold Fields Limited ( GFI ): Valuation Grade A Impala Platinum Holdings Limited ( IMPUY ): Valuation Grade A Lynas Rare Earths Limited ( LYSDY ): Valuation Grade A Smurfit Westrock Plc ( SW ): Valuation Grade A Sika AG ( SXYAY ): Valuation Grade A Vale S.A. ( VALE ): Valuation Grade A More on Amcor, International Paper, etc. Sika AG: Finding The Appeal Below 150 CHF Harmony Gold: A Quiet Pivot The Market Is Still Pricing As The Old Mode Harmony Gold: Cheap For A Reason Vale snaps six straight sessions of gains Westlake downgraded at Citi as PVC prices cool
Shortly after the opening bell, we will sell 40 shares of Broadcom at roughly $486. Following the trade, Jim Cramer's Charitable Trust will own 325 shares, decreasing its weighting to 3.75% from about 4.2%. Broadcom shares are up about 6% in pre-market trading on Tuesday, extending a run of new record highs, in reaction to Alphabet announcing an $80 billion equity raise on Monday to "fund investme...
Shortly after the opening bell, we will sell 40 shares of Broadcom at roughly $486. Following the trade, Jim Cramer's Charitable Trust will own 325 shares, decreasing its weighting to 3.75% from about 4.2%. Broadcom shares are up about 6% in pre-market trading on Tuesday, extending a run of new record highs, in reaction to Alphabet announcing an $80 billion equity raise on Monday to "fund investments in its world-class AI compute infrastructure to meet its unprecedented customer demand." This is great news for Broadcom, which powers Google Cloud by providing AI accelerators, known as tensor processing units (TPUs). Alphabet's willingness to tap the equity markets rather than the usual debt markets signals it will likely spend even more on AI investments next year. Alongside the capital raise, Alphabet reiterated its 2026 capex guidance of $180 billion to $190 billion. Broadcom's strong partnerships with Alphabet and several other major AI companies, including Meta Platforms , Anthropic, and OpenAI, should support a strong quarter and outlook when it reports earnings after the close on Wednesday. But due to our already outsized position in Broadcom and the solid run it has had into the print — up 38% since its last earnings report — we're electing to trim the position and realize a gain of more than 430% on stock purchased in September of 2023. (Jim Cramer's Charitable Trust is long AVGO. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE...
Luis Alvarez Stock index futures were lower after Wall Street scaled a record high on Monday as President Donald Trump downplayed concerns over Iran talks. Here are the four stocks to watch on the day: IBM ( IBM ) fell 3.8% in premarket trading on Tuesday even as Wedbush Securities raised its price target on the IT giant, citing “incremental positives” from artificial intelligence. The firm noted ...
Luis Alvarez Stock index futures were lower after Wall Street scaled a record high on Monday as President Donald Trump downplayed concerns over Iran talks. Here are the four stocks to watch on the day: IBM ( IBM ) fell 3.8% in premarket trading on Tuesday even as Wedbush Securities raised its price target on the IT giant, citing “incremental positives” from artificial intelligence. The firm noted that IBM continues to see solid momentum across its portfolio of AI, hybrid cloud, automation, and cybersecurity products, with customers seeking trusted, scalable, and compliant solutions for complex environments. Broadcom ( AVGO ) jumped about 6% in premarket trading after the company showcased its broadband Edge AI portfolio for smart homes and enterprises. The lineup of AI-ready broadband solutions includes a 50G Passive Optical Network gateway System-on-Chip, a comprehensive Wi-Fi 8 product family, and a joint 5G and Wi-Fi 8 fixed wireless access platform solution. Arm Holdings ( ARM ) slipped 0.59% in premarket trading despite CEO Rene Haas indicating the company may reach its $15 billion chip sales target earlier than expected due to stronger-than-forecast AI demand. In an interview with Bloomberg Television, Haas said he is “very confident” of attaining that goal by the previously stated end of the decade, with growing demand from an industry racing to build data centers and AI services potentially accelerating the timeline. HIVE Digital Technologies ( HIVE ) declined 1.05% to $4.71 in premarket trading after the cryptocurrency miner’s fiscal fourth-quarter bitcoin mining revenue fell short of analyst estimates. Bitcoin mining revenue dropped 23.9% from the prior quarter to $67.2 million, missing the Visible Alpha consensus of $74.31 million, driven by a roughly 27% decline in the average bitcoin price. More related stories Broadcom: Still A Buyer At 61x, But The Print Has To Be Flawless The Great Arm Holdings Misunderstanding HIVE Digital Technologies: From Bitcoin...
ElevenLabs sees Warsaw as its fastest-growing hub as the artificial intelligence voice company chases new customers in central and eastern Europe. Founded in 2022, ElevenLabs uses AI to create a variety of realistic voices. It’s currently headquartered in New York, but the business grew out of Poland and maintains strong links with its home country. Both co-founders, Chief Executive Officer Mati S...
ElevenLabs sees Warsaw as its fastest-growing hub as the artificial intelligence voice company chases new customers in central and eastern Europe. Founded in 2022, ElevenLabs uses AI to create a variety of realistic voices. It’s currently headquartered in New York, but the business grew out of Poland and maintains strong links with its home country. Both co-founders, Chief Executive Officer Mati Staniszewski and Piotr Dabkowski, are Polish. The privately-held company plans to increase its headcount in the Polish capital to more than 200 employees from 60 currently in the next 18 months, the CEO told reporters on Tuesday during the company’s two-day event held in Warsaw. ElevenLabs is also looking for another office space in the country. “We plan to invest here even more,” Staniszewski said. “Our hope is to seize a bigger chunk of this part of Europe.” The company’s event gathered more than 2,000 participants and was opened by Poland’s President Karol Nawrocki. The startup has recently raised $500 million in a round led by some of the world’s leading investors, including Sequoia Capital, Andreessen Horowitz and Iconiq. The firm, which was valued at $11 billion in the funding deal, plans to be ready for an initial public offering in two to three years, and considers a dual listing at the Warsaw Stock Exchange. More Deals In May, the company said it surpassed $500 million in annual recurring revenue - a gauge of forward-looking sales. It’s been on a roll, striking deals with global companies such as Deutsche Telekom AG , Boston Consulting Group and Revolut. In Poland, it works with LOT airlines, the country’s largest lender PKO Bank Polski SA and is in talks with media and telecommunications group Cyfrowy Polsat SA . Beyond selling to corporate clients, ElevenLabs is also offering its products to public institutions. It has signed agreements with five European governments, including the UK, Ukraine as well as Greece, and is in talks with five more, including a public e...
My top 10 things to watch Tuesday, June 2 1. Marvell Technology is flying over 20% this morning after Nvidia CEO Jensen Huang said at Computex that the networking supplier and custom AI chip designer could be the next trillion-dollar company. Marvell ended yesterday with a market cap of $192 billion. The stock is up over 150% in the past three months during the AI chip rally. 2. Nvidia invested $2...
My top 10 things to watch Tuesday, June 2 1. Marvell Technology is flying over 20% this morning after Nvidia CEO Jensen Huang said at Computex that the networking supplier and custom AI chip designer could be the next trillion-dollar company. Marvell ended yesterday with a market cap of $192 billion. The stock is up over 150% in the past three months during the AI chip rally. 2. Nvidia invested $2 billion into Marvell back in March, and the companies are working together on optics technology to replace more copper in data centers. We're seeing big moves in optical stocks. Lumentum up 7%. Coherent up 4.5%. Club name Corning is up 5%, and is the one to buy. 3. No quit in Club name Arm Holdings . Shares edged higher after CEO Rene Haas told Bloomberg News that he's hopeful Arm's new AGI CPU will reach its $15 billion sales target ahead of its initial 2031 target. "Demand has been stronger than we anticipated," Haas said. Securing sufficient manufacturing capacity is critical to reaching these ambitions. 4. Hewlett Packard Enterprise delivered a blowout, sending the stock up over 25%. The kind of quarter I would have expected next year. First Dell , now HPE. Demand for servers is red hot thanks to AI, but not just in the cloud. The traditional enterprise server business is booming as customers modernize infrastructure. HPE's acquisition of Juniper Networks, which closed last summer, is proving to be a good deal. Loop Capital upgraded it to buy from hold. Price target of $75, up from $23. 5. SK Hynix plans to double its wafer capacity over the next five years, according to the chairman of the South Korean memory giant's parent company. Soaring demand and tight supply have sent memory prices soaring and turned the memory group into a market-leading trade. Could SK Hynix's ambitions derail that? Not this morning, at least, with rival Micron higher. 6. Alphabet announced a surprising $80 billion equity offering to primarily fund its AI buildout. Berkshire Hathaway committed...
SlavkoSereda/iStock via Getty Images The market has been on a rampant bull run for the better part of the last month, despite rising consumer inflation , no permanent ceasefire in Iran, Hormuz traffic not expected to recover anytime soon and lagging consumer confidence . Anyone that tried to predict a top or a bottom has likely failed. In fact, active investors are living through one of the worst ...
SlavkoSereda/iStock via Getty Images The market has been on a rampant bull run for the better part of the last month, despite rising consumer inflation , no permanent ceasefire in Iran, Hormuz traffic not expected to recover anytime soon and lagging consumer confidence . Anyone that tried to predict a top or a bottom has likely failed. In fact, active investors are living through one of the worst periods in history, with only 25% of large-cap active equity mutual funds beating the S&P 500 ( SP500 ) YTD, the lowest reading since 2021 (and worse than during the 2008 crisis peak). Yet, I think opportunities abound. In times of euphoria and high volatility, I believe alpha is primarily generated by investors able to spot gaps in market narratives and entering selected trades based on those insights. Waiting for a “big reset” or trying to time the market is a big mistake. Today, I will discuss what some of these asymmetries might be today. The semiconductor narrative asymmetry: something has to break Take, for example, the current situation when it comes to semiconductors. I think there is a discrepancy between the valuation of NVIDIA Corporation ( NVDA ) and that of other semiconductor stocks that cannot last forever. As the table below outlines, Nvidia is trading at a discount against the majority of other semiconductor stocks, despite being still by far the market leader in AI chips and eclipsing all other players in revenue. Author's work The situation can only logically resolve in one of three ways: If semiconductors are overhyped, these stocks should return to valuations in line with the broader AI / Tech sector, or crash even further. If these valuations correctly reflect the future of the technology and increasing demand in compute, Nvidia will need to grow to a far richer valuation matching its peers. If the truth is in the middle, Nvidia should see its valuation increase while semiconductor stocks should see it declining to meet somewhere in the middle. A logic...
At about $170.68 a share, Arista Networks (ANET) is trading near its 52-week high, fueled by a surge in demand for AI networking infrastructure. The world's largest tech companies, including hyperscalers such as Microsoft (MSFT) and Meta Platforms (META), are spending hundreds of billions of dollars to build AI data centers. Arista's high-speed Ethernet switches and routers provide the networking ...
At about $170.68 a share, Arista Networks (ANET) is trading near its 52-week high, fueled by a surge in demand for AI networking infrastructure. The world's largest tech companies, including hyperscalers such as Microsoft (MSFT) and Meta Platforms (META), are spending hundreds of billions of dollars to build AI data centers. Arista's high-speed Ethernet switches and routers provide the networking fabric that enables massive clusters of AI GPUs to communicate efficiently at scale. The company rec
imv/E+ via Getty Images Rio Tinto ( RIO ) has continued to rally this year, up another 30% YTD, on the back of higher commodity prices and prime exposure to the energy transition and AI demand. While this has resulted in exceptional operational results for the company, it's not obvious to me where the next leg of commodity price increases come from. That's not to say the market can't stay tight an...
imv/E+ via Getty Images Rio Tinto ( RIO ) has continued to rally this year, up another 30% YTD, on the back of higher commodity prices and prime exposure to the energy transition and AI demand. While this has resulted in exceptional operational results for the company, it's not obvious to me where the next leg of commodity price increases come from. That's not to say the market can't stay tight and fundamentals can't remain supportive in the near-term. After ten years of covering this name, I am downgrading to hold on a valuation basis and look for a lower entry point before getting involved. Catching Up 10 Years Later It's been quite some time since I've taken a look at Rio Tinto. The last time I covered the company I wrote a piece signaling some caution into the back half of 2016 based upon iron ore fundamentals - Rio Tinto Will Likely Underperform . I was impressed by the company's operational position and competitive moat, but I had felt that with things turning in their core markets that they would underperform higher beta cyclicals at the time. Through the end of 2016, higher beta peer Vale ( VALE ) put up nearly 46% while RIO put up close to 23%. With that being said, Rio Tinto on its own was still a buy and I had maintained the rating. Here we are in 2026, 600% later for the stock, and a lot has changed. A Robust Commodity Price Backdrop RIO is a leading low-cost producer at scale in copper, the #1 integrated Western producer in aluminum, the #1 largest pipeline of Tier 1 options for lithium, and the #1 outright global iron ore producer. The iron ore and copper business lines have the highest EBITDA margins, at nearly double that of the combined profile of aluminum and lithium. I find that the below chart is very helpful in understanding the competitive, low-cost positioning of the company. It's worth noting that from an EBITDA perspective , 46% comes from iron ore, 31% comes from copper, and 23% comes from aluminum and lithium. Investor Presentation Source:...