Last Friday’s market drop, denoted by a drop in the 3% range, was followed by a snap-back on Monday. On Tuesday, stocks fell again only to rally sharply within a few hours.
The S&P 500 (SPY) and Nasdaq (QQQ) reacted to Fed Chair Powell suggesting an end to quantitative easing. This indirect interest rate-like cut encouraged buyers to enter the stock markets. Still, in the last hour of trade, the index gave up some of the recovery.
Nvidia (NVDA), down 4.4%, is the benchmark artificial intelligence stock to watch. It fell alongside memory supplier Micron Technology (MU) and Intel (INTC). Advanced Micro Devices (AMD) traded above $224 before giving up the intraday gains. Oracle (ORCL) said it would deploy up to 50,000 AMD-based AI chips. This included not only GPU chips but also CPUs.
AMD’s CPUs continued to offer far more power and performance at a good price compared to Intel. Unfortunately, valuations are worrisome. The P/E is 125 times, while the forward P/E is a less expensive 35 times.
In the PC market, Dell Technologies (DELL) slipped. HP Inc. (HPQ) gained 4.35%, so it may have the momentum to trend higher today. The PC refresh might benefit from consumers upgrading to Windows 11. However, Windows 10’s end-of-life support is not a major security threat. Consumers may run a third-party antivirus software program and keep their browser up to date. That would limit security risks.
