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1 Stock To Buy, 1 To Dump When Markets Open: NVIDIA, Colgate-Palmolive

Published 03/21/2022, 02:50 AM
Updated 09/02/2020, 02:05 AM

Stocks on Wall Street rallied on Friday, with the benchmark S&P 500 index scoring its biggest weekly gain since November 2020, as investors continued to digest news of the Federal Reserve's decision to raise interest rates along with the release of its dot-plot agenda.

S&P 500 Daily Chart

Market players should expect more wild swings in the week ahead as they monitor fresh developments amid the ongoing Russia-Ukraine conflict and renewed COVID outbreaks in Asia and Europe.

Also on deck are key economic data, including the latest report on durable goods orders, as well as earnings from notable companies such as Nike (NYSE:NKE), Adobe (NASDAQ:ADBE), and General Mills (NYSE:GIS).

So, with a busy week of economic news ahead, and market volatility still in play, we've highlighted one stock likely to be in demand and another which could see a further slide.

Remember though, our timeframe is just for the upcoming week.

Stock To Buy: NVIDIA

After notching its best weekly performance in more than 20 years, NVIDIA (NASDAQ:NVDA) could enjoy further gains in the days ahead as the tech giant—one of the global leaders in providing graphic processing units (GPUs) for gaming consoles, data centers, and self-driving vehicles—hosts its annual ‘GTC 2022’ event.

The four-day virtual conference kicks off on Monday, Mar. 21, and will end on Thursday, Mar. 24. It will be broadcast live on the NVIDIA website. Most of the spotlight will fall on CEO Jensen Huang’s highly anticipated keynote speech, scheduled for Tuesday at 11:00AM ET.

Based on the agenda, Huang will be discussing emerging trends and innovations driving transformation in the tech industry, including the power of artificial intelligence (AI), deep learning, as well as accelerated computing in the data center, cloud, and edge. Other key topics to be discussed include the Omniverse, gaming, crypto, and cybersecurity.

In addition, members of NVDIA’s leadership team are also expected to provide fresh details on the company’s new products and features, with most of the focus on the next-generation Hopper GH100 GPU.

At its last GTC event in April 2021, NVDA shares jumped 10% after revealing upbeat news on graphics, self-driving car technology and more.

NVIDIA Daily Chart

Shares of NVDA soared 19.7% last week, scoring their biggest weekly gain since September 2001. The stock ended Friday’s session at $264.53. At current levels, the Santa Clara, California-based chipmaker has a market cap of $662.9 billion, making it the seventh most valuable company trading on the U.S. stock exchange, ahead of names like Meta Platforms (NASDAQ:FB), JPMorgan Chase (NYSE:JPM), Walmart (NYSE:WMT), and ExxonMobil (NYSE:XOM).

NVIDIA didn't escape the recent wider selloff in many high-growth tech stocks, as its shares have underperformed the broader market this year. Year-to-date, NVDA is down 10%, compared to the S&P 500's 6.4% drop over the same timeframe. Shares of the semiconductor giant are approximately 24% below their record high of $346.47 touched in November 2021.

Stock To Dump: Colgate-Palmolive

Shares of Colgate-Palmolive (NYSE:CL) are likely to suffer another volatile week as one of the largest U.S. consumer products makers continues to deal with a plethora of negative developments impacting its core business.

The New York City-based corporation, which specializes in the production, distribution, and provision of some of the world’s most well-known household, health care, and personal care products, has seen its shares steadily drop to new lows in recent weeks amid an accelerating inflationary environment, rising raw material and logistics costs, supply chain issues, as well as potential changes in consumer behavior.

Shares of CL—which are down 15.4% year-to-date—closed Friday’s session at $72.20, its lowest level since June 2020, earning it a valuation of roughly $60.7 billion. From a technical standpoint, Colgate-Palmolive stock has recently fallen below key price levels, including its 50-day, 100-day, and 200-day moving averages, which usually signals more losses ahead as sellers are in control. And having dropped to new 52-week lows in a week in which the market had its best run in 16 months is another bad sign for CL.

Colgate-Palmolive Daily Chart

Colgate-Palmolive is expected to deliver disappointing earnings and guidance when it reports first quarter results on Friday, Apr. 29. Consensus expectations call for the consumer staples giant—which makes essential basic items such as toothpaste, soap, and deodorant—to post earnings per share of $0.75, dipping about 6% from EPS of $0.80 in the year-ago period. Revenue, meanwhile, is forecast to rise less than 2% year-over-year to $4.41 billion, as surging consumer prices reduce demand for its household goods and products.

Latest comments

buy both
Nvidia in a degrowth stage like all tech, movies, gaming, social media taking hits from inflation but also just a general malaise from overuse Covid.Data center suffer too from unease of markets recognition by corporations, freezing their budgets
@ChuckKay & @Gustavo Medina... NVDA is not overpriced and not overbought. Funny. Clearly the two of you lack the wherewithal of understanding technical and fundamental analysis of a stock.
Is anyone tracking this Jesse with his predictions …?!
Buy a bubble overpriced tech stock and sell a depressed consumer staple with a hawkish Fed that has quit QE?  Right.  Why not just take your hard earned money and flush it down the t oil et?  The result would be the same.
Nvidia overpriced? 🤓
You have to do exactly the opposite to make money lol NVDA overbought and CL oversold
I like value stocks now too over high growth semis
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