Stock Market Analysis and Recommendations
Recently, many people have requested stock recommendations. It's understandable to feel anxious when others seem to be profiting while you're on the sidelines, holding cash and waiting for a market rebound that doesn't seem to materialize. Today, I'll recommend three stocks for consideration, but first, let's review the current market situation.
Market Overview
Yesterday brought two pieces of potentially good news: the court halted Trump's tax policy, and NVIDIA's strong financial report triggered a tech stock rebound. This initially boosted the U.S. stock market, but gains were partially erased as the Trump administration announced its intention to appeal the court's decision, possibly even to the Supreme Court.
The future of this tax policy is uncertain, as a legal battle is now underway. Regardless of the outcome, the volatility caused by tariff-related news has significantly impacted the stock market, creating a roller coaster-like experience for investors.
Riding the Roller Coaster
The recent market crash and subsequent rebound have been a wild ride. It's important to remember to wear your "safety belt" and avoid panic selling during downturns.
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Some investors who followed the advice to buy quality stocks during the dip have now seen their accounts recover and become profitable.
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Others, unable to withstand the volatility, "jumped off the roller coaster" and missed the subsequent rebound.
Many are now asking what stocks to consider buying. The following three stocks are of good quality and can be considered for purchase.
Investment Strategy: The Football Team Approach
My investment strategy is based on a football team model, with stocks categorized as "forwards," "midfielders," and "defenders." The team is structured to have a balance, and as the coach, I will share three potential stocks that would be players in the team.
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Forwards: High-potential, higher-risk stocks that can deliver substantial returns in a bull market.
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Defenders: More defensive stocks that tend to decline less during bear markets.
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Midfielders: Stocks with both offensive and defensive capabilities, offering a more stable performance overall.
Stock Recommendations
Here are three stocks to consider, based on the football team strategy:
1. NVIDIA (NVDA): The Forward
NVIDIA, often discussed on this channel, is considered a star player. It consistently outperforms other technology giants in growth and profitability.
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Growth: NVIDIA consistently exhibits exceptional growth metrics compared to other technology giants.
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Profitability: Its profitability metrics outperform several major technology companies.
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Valuation: The valuation is similar to Amazon and Microsoft, higher than Google and Meta, but lower than Tesla.
While past performance is not indicative of future results, NVIDIA has delivered substantial returns over the long term. However, it's unrealistic to expect the same level of growth in the next decade due to its already large market capitalization. This stock is considered a "forward" due to its potential for high growth.
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The recent financial report showed strong performance, with a 69% increase in overall income.
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Despite export restrictions on certain AI chips, the company remains optimistic about the global demand for its AI infrastructure.
Investment Strategy for NVIDIA:
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Consider opening a position between $130 and $118.
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If the price drops below $118, consider adding to your position.
A small "observation warehouse" is recommended for those hesitant to buy, allowing them to participate in the stock's movement without significant risk.
2. Apple (AAPL): The Midfielder
Apple is considered a "midfielder" due to its stable growth and overall performance. The revenue grows steadily about 3%-5% a year. While its growth rate is not as high as some other companies, it's still growing.
- Apple is a stable stock suitable for long-term holding.
Apple's stock price has been affected by tariff concerns, falling from a high of $259 to below $200. If the court ultimately terminates Trump's tariff policy, it would be a significant benefit for Apple and could lead to a substantial rebound in its stock price.
Investment Strategy for Apple:
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Consider opening a position below $200.
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Add to your position if the price drops to $193 or lower.
3. Costco (COST): The Defender
Costco is a "defender" known for its strong defensive capabilities, particularly during market downturns. Even in 2022 where the three indexes fell more than 20%, Costco only fell 10%.
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Costco tends to hold its value better than other stocks during bear markets.
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It also exhibits strong growth during bull markets, often outpacing major indexes.
Financial Performance:
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Recent financial report exceeded expectations for profit and revenue.
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Warehouse member sales increased by 8%.
Investment Strategy for Costco:
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Given the high stock price (around $1,000), start with a small "observation warehouse" by purchasing one share.
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If the price falls below $1,000, consider opening a full position.
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Add to your position at $960 and $915, purchasing one share at each price point.
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The goal is to gradually build the position up to 10 shares.
Additional Resources: Morningstar Reports on Moomoo
MooMoo offers free access to Morningstar reports, providing in-depth analysis of stocks. This can help you better understand a company's fundamentals. To access these reports, simply navigate to a stock's page and click on the "prediction" section.
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