CEO Watchlist: Week In Review

April 20, 2025

TOP NEWS AFFECTING THE STOCK MARKET THIS WEEK:

Nvidia vs the U.S.: Stocks Could Suffer (Source)

Stocks mentioned: $NVDA, $TSM, $INTC

Earlier this week, Nvidia (NVDA) announced a massive $500 billion plan to expand AI infrastructure in the U.S., a move that was publicly praised by officials, especially President Donald Trump. Surprisingly, less than 24 hours later, the U.S. government hit the company with new export restrictions, which banned the sale of its H20 AI chips to China. For those that don't know why this was a bit of a shock, it's because these chips were specifically built for China based on the US regulations. These were much weaker chips that were approved by the government for China. Needless to say, investors were shocked at this surprise reversal, as it could cost Nvidia $5.5 billion in lost orders and underscores how quickly geopolitical tensions can reshape the outlook for top tech stocks. With China being ~13% of Nvidias business this could really hurt their future earnings reports and in turn their stock price unless something changes soon on the trade war.

Now despite these headwinds, we still believe that as technology becomes more integrated into everyday life, semiconductors will only grow more essential, and companies like Nvidia are positioned to benefit from consistent, long-term demand. That's why we still like Nvidia as an investment even though it's going through a short term rough patch. Nvidia is the clear leader in semiconductors and we like to invest in the winners but there is another name which practically holds a monopoly in the space and that is Taiwan Semiconductor (TSM). This is the company that produces all of Nvidias chips as well as other companies like AMD, Apple, Amazon and more. On top of their monopolistic power in chip production they just reported a blowout quarter with net income surging ~60% year-over-year, fueled by strong demand for AI chips. They didn't even sound worried about the trade wars on the earnings call. Remember not all chipmakers are created equal. For instance, Intel (INTC), which is set to report earnings this week, has been falling behind. TSM even stated during its earnings call that it won’t be sharing its tech with other chip companies right now, which was a major disappointment for Intel investors hoping for a partnership between the two. Overall, we remain bullish on the semiconductor sector for the long term despite some short term volatility we expect to see in the stock prices. We are being very selective with the individual names we invest in by focusing on those with the strongest long-term potential while avoiding other stocks like an Intel that has a lot more risk in our opinion. If you're an Investment Club member, keep your eyes open throughout the week as we make updates to our portfolios, that we share with you, as we expect a lot of new information to come out.

Netflix: The Next Trillion Dollar Company (Source)

Stocks mentioned: $NFLX, $AMZN, $DIS

Although markets have shown concern over the past few weeks, some companies are actually showing a lot of resilience such as a Netflix (NFLX). Even while its legacy media peers struggle, Netflix has consistently beat expectations for their earnings reports and their report from last week was no different, with a large beat on the top and bottom line. But here's where things get interesting... A recent Wall Street Journal report revealed a leaked internal message at Netflix to double revenue and triple operating income by 2030, which would potentially push Netflix’s valuation into trillion-dollar territory. These ambitions come despite economic uncertainty and rising trade tensions, showing management’s confidence in streaming’s resilience, even if tariffs and a recession could test that growth path.

As we mentioned in past newsletters, companies like Amazon (AMZN) offer some competition for Netflix, as they’ve also stepped into the streaming game with movies, TV shows, and even live sporting events. Disney (DIS) is another key player to watch out for, as they're backed by a strong intellectual property content library and world-wide brand recognition through platforms like Disney+, Hulu, and ESPN+. While Amazon is arguably the better "overall" stock due to its massive scale, diversified business model, and multiple streams of income, there is no denying Netflix's absolute dominance in the streaming space. Companies like Disney do have unique content rights due to their decades of building a empire of children's movies and shows but, Netflix still holds a clear edge when it comes to global reach and the modern viewer as Disney continues to face cultural and political divide in their business model. The way we see it is Amazon is very diversified outside of streaming so it makes it our favorite choice in a diversified portfolio. Disney has a massive intellectual property library which will be able to create a niche sector for them forever in the streaming world while also having a diversified business model with their parks, cruises, etc but, they have a lot of controversy which isn't great for stock price. But if we want to claim who the clear winner is in streaming our bet is none other than Netflix and we do believe they could hit that trillion dollar goal if they keep growing at the rate they're on.

A "Death Cross" Just Formed In The Nasdaq... (Source)

Stocks mentioned: $QQQ, $GLD, $GDX, $AEM

This past week the Nasdaq (QQQ) flashed a rare bearish technical pattern called a “death cross." This has stirred up potential recession fears, especially as escalating tariff policies continue to weigh on investor sentiment. A death cross happens when the 50 day moving average of a stock or index crosses down below the 200 day moving aveage (see picture below this story). It's one of the most widely used and accurate technical analysis signals, so investors are naturally getting worried about what's to come. Even BlackRock CEO Larry Fink warned that the U.S. economy may already be in decline, adding to the sense of unease. Now, while historical data shows the death cross isn’t always a sign of disaster, and markets often recover months later, short-term volatility remains a real concern. That’s why we’ve been shifting our focus to sectors that are actually benefiting from this uncertainty.

One area that’s been quietly thriving during all this market turbulence is gold. The metal recently hit new all-time highs as investors seek safety from inflation, geopolitical risks, and recession fears. While the SPDR Gold Trust (GLD) offers exposure to gold’s price movement, we’ve also been watching gold mining stock ETFs like the VanEck Gold Miners ETF (GDX), which tends to offer higher upside potential, but also more downside risk potential. Interestingly, gold miners haven’t followed gold to new highs, largely due to rising production costs, labor shortages, and margin pressure within the industry. In other words, while gold is surging as a safe haven, the companies that dig it out of the ground are still playing catch-up. And although GDX provides diversified exposure to the sector, it can also include underperforming stocks that drag on returns. That’s why it may be worth exploring individual names like Agnico Eagle (AEM), a top-tier gold miner that is hitting all-time highs. Remember, picking individual stocks naturally comes with less diversification and added risk when compared with owning a broad based ETF but it you are a good stock picker this is the route to get much larger outsized performance. As always, it’s about balancing opportunity with your risk tolerance, especially in a market like this.

INSIDER TRADES FROM THE WEEK:

1. Dollar Tree (DLTR) - Stewart Glendinning, CFO, bought ~$1.2 million of DLTR stock on April 14-15, 2025, but it was reported to the public on April 16, 2025. (Source)

2. Gran Tierra Energy (GTE) - Equinox Partners Investment Management LLC, a 10% owner of the company, bought ~$3 million of Gran Tierra Energy stock between April 2-14, 2025, but it was reported most recently to the public on April 16, 2025. (Source)

3. CVR Energy (CVI) - Carl Icahn, a 10% owner, bought ~$1.5 million worth of CVR Energy stock on April 16-17, 2025, but it was reported to the public on April 18, 2025. (Source)