TMTB EOD Wrap: NVDA (Nvidia) = AAPL (Apple)?

Good afternoon. QQQs +70bps as the AI vibes continue in full force. On the war front, the ceasefire is holding and calm in Lebanon helped as Netanyahu said Israel would seek to hold “direct negotiations” with Lebanon and reports suggest Trump is urging the Israeli government to ease back on the Hezbollah campaign for the time being. Brent was up 3% after yesterday’s big decline. Yields and Fed expects stayed roughly flat.

Ok enough war, back to AI vibes. SOX +2% with leading AI names taking us higher again while IGV -4% sold off hard in the early morning. Another massive spread — I’ll spare you the stats today, but suffice it say it they weren’t good as the software vs. semis spread hits new lows:

What was different today? Well, it was the day where Claude finally came for infra sw as their managed agent announcement had investors questioning what it means longer term for the space: NET -8.7%; SNOW -12%; DDOG -6.5%; MDB -8.4%. We dive in deeper on potential implications below in the Software section.

It was just a couple days ago about 10 minutes before the ceasefire announcement when we wrote that the HOT AI SUMMER vibes were here again, and were being kept under by the Iran headlines. With the worst of those headlines largely gone, investors have heavily re-grossed the space. It’s not only leading sectors like memory, optical, hdds, etc. but the laggards have finally caught a bid over the last couple of weeks: AMD/INTC have been on a tear all month; NeoClouds/Miners have had a strong bid with NBIS leading the way higher; DELL is hitting new highs; ARM’s catching a bid; AVGO is up close to 20% since the last day of March; the hyperscalers seem to finally be out ROI purgatory as we head into earnings season. It’s like the good ol’ days.

However, there’s one name that’s conspicuously missing from that list: NVDA, which while up close to 10% since end of March, has severely lagged the rest of AI semi names. Some good discussion in TMTB Slack here around whether NVDA = AAPL in 2010 and what can get it going (50% of FCF buyback starts in the summer - they have announced buyback programs in Aug in each of 2023, 2024 and 2025, but in 2022 it was in May.)

I didn’t really get the NVDA = AAPL in 2010 argument, but for some reason my intuition (we got a feeling…) said let’s look back at AAPL in 2010. We love our analogs here at TMTB, and we just found a new one. Here’s AAPL in 2010:

Here’s NVDA now:

Beautiful. I’ll leave it up to your imagination to guess what happened next for AAPL (hint: up).

I wasn’t expecting to find that analog, but if you’ve been following along, you guys know NVDA is following our preferred chart path we had been hoping would play out: mainly a dip below the range and break back above. We initiated a medium-term position then. Last thing we want to do is get caught in a multi-month range on a medium term trade, so we’ve waited for it to cross the moving averages (20d and 150d today) to add to our position again. Having the HOT AI SUMMER vibes finally back, knowing how tech investors love to move into remaining laggards and having an analog give us confirmation of what could potentially happen, we think this could be NVDA’s time. Now, I know NVDA has acted like AMZN this year in that 9/10 times when you think it will finally get a bid, it completely lets you down…

Ok let’s get to the good stuff…

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