3-Stock Lunch: Goldman Sachs, Nvidia & Toll Brothers

Published: Sep 10, 2024 Duration: 00:04:44 Category: News & Politics

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THEY'RE FEELING MORE PRESSURE. AND YOU'RE SEEING THAT IN SOME PLACES GENERALLY SPEAKING, I FOUND THE CEO/CFO SET AT THIS CONFERENCE QUITE CONSTRUCTIVE >>> DAVID TRAINER, WELCOME TO YOU. WHAT DO YOU THINK ABOUT THE STOCK HERE >> GOLDMAN STACKS IS ONE OF OUR FAVORITE FINANCIALS. HAVING BEEN ON WALL STREET MY SELF-, GOLDMAN WAS GENERAL THE TOP OF THE PECKING ORDER THEIR PROFITS CONTINUE TO REFLECT THAT, AND WE CONTINUE TO BE CONSTRUCTIVE ON THIS STOCK. IT'S STILL RELATIVELY CHEAP. >> AND LET'S MOVE ON TO ANOTHER ONE, INVINNA JENSEN HUANG WEIGHING IN ON THE LATEST GENERATION OF CHIPS, SAYING THE SCRAMBLE FOR HIS COMPANY'S PRODUCTS HAS FRUSTRATED CUSTOMERS AND RAISED TENSIONS. >> DEMAND IS SO GREAT THAT DELIVERY OF OUR COMPONENTS AND OUR TECHNOLOGY AND INFRASTRUCTURE AND SOFTWARE IS REALLY EMOTIONAL FOR PEOPLE. IT DIRECTLY AFFECTS THEIR REVENUES AND COMPETITIVENESS, SO WE PROBABLY HAVE MORE EMOTIONAL CUSTOMERS TODAY THAN -- AND DESERVEDLY SO. IF WE COULD FULFILL EVERYBODY'S NEEDS, THE EMOTION WOULD GO AWAY, BUT IT'S VERY EMOTIONAL, REALLY TENSE, WE HAVE A LOT OF RESPONSE, AND WE'RE TRYINGTO D THE BEST WE CAN. >> THAT SOUND LIKES THAT DEMAND IS OUTSTRIPPING THEIR ABLE TO SUPPLY IS THAT A PROBLEM OR AN OPPORTUNITY? >> I THINK BOTH. THERE'S AN ENORMOUS AMOUNT OF CAPITAL INTO THE AI SPACE, AND, LOOK, NVIDIA IS A GREAT COMPANY. HIGH RETURNS ON CAPITAL, TEN TIMES WHAT EVEN GOLDMAN SACHS IS BUT THE EXPECTATIONS BAKED IN THE STOCK PRICE HAVE MORE THAN THAT BAKED IN. WHEN WE RUN THE NUMBERS, WE JUST DID A BIG CASE STUDY ON NVIDIA THE STOCK PRICE IMPLIESED THAT THE PROFIT WILL BE SOMETHING LIKE TEN TIMES BIGGER THAN APPLE OR MICROSOFT COMBINED TODAY. THE REVENUES WILL BE BIGGER THAN THE GDP OF THE UK. SO WE'RE TALKING ABOUT A STOCK THAT HAS ALL THAT GOOD NEWS PRICED IN. NVIDIA HAS BECOME A POPULAR AND CROWDED TRADE. I DON'T THINK INVESTORS SHOULD BE PRICED THAT MAYBE ALL THE GOOD NEWS IS PRICED IN WE CALLED THE TOP IN THE SYMPTOM A COUPLE WEEKS AGO, AND IT TURNED OUT TO BE WE THINK THIS STOCK HAS MORE DOWN SIDE RISK. >> SO THAT'S A SELL. >> YES >>> IT'S ALMOST A SHORT, BUT I DON'T KNOW THAT YOU WOULD DARE WITH A NAME LIKE NVIDIA. >>> TOLL BROTHERS IS ON THE DECLINE TODAY. CEO DOUG YEARLY WAS WEIGHING IN ON THAT. >> THE BUILDERS HAVE DONE SO WELL WITH HIGH RATES WE'VE GOT DOUSING ON 7 TO 8% RATES FOR TWO YEARS, FINALLY THEY'RE IN THE LOW 6s. THAT'S WHEN THE BUILDERS SELL MORE HOUSES. THE AFFORD ABILITY ALL CHANGES >> I WONDER IF THAT TAKES AWAY THEIR COMPETITIVE EDGE, THOUGH MAYBE THEIR COMPETITION HEATS UP >> WE LIKE THIS STOCK. WE'VE BEEN CONSTRUCTIVE WITH A BUNCH OF HOME BUILDERS FOR A WHILE. DR HOTTEN HAS BEEN ONE OF OUR TOP IN FOCUS AND, YOU KNOW, LOOK, THE SUPPLY/DEMAND OUTLOOK FOR THESE BUSINESSES IS REALLY STRONG. THERE'S TOO LITTLE SUPPLY. WE NEED TO BUILD MORE HOMES. THE BEST BUILDERS, THE REALLY PROFITABILITY COMPANIES WE THINK TO BE IN A POSITION, AND THEIR STOCK IS PRICED AS IF THERE'S NO PROFIT GROWTH. THE CURRENT STOCK PRICE IMPLIES -- THE OPPOSITE KIND OF, WITH NVIDIA. TOLL BROTHERS IMPLIES ZERO PROFIT GROWTH FROM CURRENT LEVELS WE LIKE THE FACT THAT IT'S PROFITABLE, YET THE VALUATION IMPLIES THERE WOULD BE NO PROFIT GROWTH SO THAT'S GOOD RISK/REWARD FOR US AND IT'S REALL

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