More & More Signals Popping Up That Suggest A Pullback Is Near | Lance Roberts

**SPEAKER_1** (0:01)
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How do you want to split it?

**SPEAKER_2** (0:27)
Actually, dinner's on me.

**SPEAKER_1** (0:29)
Okay, big money.

**SPEAKER_2** (0:29)
Well, I got a Venmo balance that I can spend with my Venmo Debit MasterCard, so.

**Adam Taggart** (0:34)
Well, I Venmo'd you three times last week, so it's kind of on me actually.

**SPEAKER_2** (0:38)
Yeah, you send it, I spend it.

**Lance Roberts** (0:39)
Did my money get like reincarnated?

**SPEAKER_2** (0:41)
Yeah, it's chicken shawarma. You want it back?

**SPEAKER_1** (0:44)
I can't believe you like ate my Venmo.

**SPEAKER_2** (0:47)
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**Lance Roberts** (0:57)
So I'd be a little bit cautious here with exposures. We're still short term on a sell signal. Markets are not overbought, many stretch of the imagination. But that's also that decline in momentum is also a bit of a, quote unquote, bearish indicator in terms that momentum itself is starting to weaken here a bit. So from a risk management standpoint, I would have stops set around the previous highs, maybe around the 50-day moving average.
And expect potentially a pullback to that level.

**Adam Taggart** (1:35)
Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host, Adam Taggart. Welcome you back at the end of the week for another weekly market recap featuring my good friend, the Epicurean portfolio manager, Lance Roberts. How are you doing, Lance?

**Lance Roberts** (1:48)
I'm doing fine this morning.

**Adam Taggart** (1:49)
How are you?
Honestly, as we talked about before, the camera on, I'm running close to empty on gas this week. It's just been a crazy week. I can't really complain about it. It's all largely good things, but sometimes things come so fast and so furious. It's a little hard to process at all in real-time, but hey folks, not looking for sympathy. These are all high-quality issues.
Lance, let's start early on here, maybe with the markets, the TA, etc. A big development this week was that Nvidia had its earnings call and crushed it again, gave unbelievable guidance. And so the question that's sort of hanging out there right now is, hey, did Nvidia just save the markets, especially the AI trade? Was this big enough to actually give, you think, a material sustainable boost to stocks here?

**Lance Roberts** (2:50)
No, I mean, you still got a lot of narratives going on. I mean, if you take a look at market headlines and people putting out news about this, that and the other thing, there's still this ongoing debate about off balance sheet financing. And every time somebody says something, then there's like, yeah, but over here, OpenAI is not ever going to make any money. It's a complete fraud. It's an in run. So you have all the stuff that's weighing on that trade. It's just sentiment. But when you look at the actual data, and again, if you haven't been to our website today at realinvestmentadvice.com, we just published our daily market commentary today, which is a full discussion on Nvidia and its earnings announcements and those types of things. This is kind of an analysis that we published this morning. You know, revenue was up 106% on a year over year basis to $96 billion. That's almost $100 billion in revenue.
Data center revenue was $89 billion. That was up 117% year over year operating income. Now, operating income is important because that strips out one-time gains. So, you know, there was a lot of conversation about Google. It was like, well, their income, their net income had a lot of one-time gains from their anthropic stuff. Well, operating income strips all that out, $63.7 billion. That was up 124% year over year. Gross margins were 75%. EPS on non-GAAP was $222. That was up 120%.
Now, look, the growth is real, right? There's certainly some issues on the balance sheet. Accounts receivables are up, no doubt about that.
A lot of this stuff that is being done on the accounts receivable side is certainly a concern because if the end customer doesn't pay that accounts receivable, that's certainly a concern. That's certainly going to impact their revenue down the road. If you would just assume that 100 percent of their accounts receivables are never going to get paid, well, then that's certainly worth being careful about. That's something certainly worth considering. It's not an absolute pristine kind of report. There's certainly some things to be concerned about, but that's every report. The problem is that the markets just, and particularly people trying to find the bearish case for Nvidia because they're hoping for AI to crash and it's all going to come crumbling down, which I'm not sure what the benefit of that is, but that's what they want. Maybe it's because they missed out on owning the stocks that went up, and so now they want to crash, whatever the reason is. You can certainly nitpick an earnings announcement and try to find things, but you have to make some really, really big assumptions that everything that's going on with AI is a complete sham and it's never going to work out. You and I both know that that was what everybody was saying back during about the Internet back in the late 90s. There were certainly some ugly hickeys that came along with the dotcom crash, but there's a very big difference between the companies reporting earnings today versus the companies that are reporting earnings like Global Crossing and Lucent, some other companies back then. Huge differences about where that revenue generation is coming from, and there is a lot of revenue coming right now. So even if there's a little bit of a ding down the road, it's not going to be this dotcom prices that we experienced back in the early 2000s.