What happened
Nvidia (NVDA 4.14%) stock was one of the strongest performers out of a group of many strong performing semiconductor stocks Thursday -- and for good reason. On Thursday, Nvidia sketched out plans to attack what it called a trillion-dollar opportunity to grow its annual sales many times in size, foreseeing eventual addressable markets as big as:
- $300 billion for sales of automotive chips.
- $300 billion more from sales of other chips and systems.
- $150 billion from selling artificial-intelligence enterprise software.
- $150 million from Omniverse enterprise software.
- $100 billion in annual revenue from video gaming services such as GeForce Now.
Of course, that still leaves the question why Nvidia stock is down 2.8% as of noon ET today.
Image source: Getty Images.
So what
So what changed today? Two things, actually, one good for Nvidia, and one not so good.
The good news today is that Bank of America just released a note describing a new investing acronym for investors: "MANGO," which appears to be short for the semiconductor stocks Marvell Technology, Advanced Micro Devices, Nvidia, GlobalFoundries, and ON Semiconductor. (If you want to stretch the acronym a bit, you might also include Broadcom -- which doesn't seem to fit alphabetically until you recall that its stock ticker is still "AVGO.")
Bank of America believes that the "structural importance of semis to the rapidly digitizing global economy cannot be overstated," reports TheFly.com today. For this reason, the analyst is highlighting these five (or six) semiconductor stocks as his favorites, saying they're all "levered to the right end-markets with solid demand visibility and consistent execution."
Now what
As I said, that's the good news. Now here's the bad: All five (indeed, six) of these semiconductor stocks had already risen strongly on Thursday, before Bank of America shook the tree and dropped this new investing acronym on us. As a result, investors aren't reacting as strongly today to BofA's endorsement as they might have reacted had the stocks not already run higher yesterday.
Instead, investors appear to be taking profits today after yesterday's strong performance. Granted, that's not necessarily bad news for the business prospects of any of these companies. It's certainly not great news for their stock prices today, however.
And it means investors may need to wait for a pullback if they want a ripe opportunity to pick some cheap Nvidia shares again.
