Weekly Portfolio Update 31.05.21
Stock market closed higher, Nvidia outperformed the market, GM restarted production plants and more.
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📮Portfolio Performance Report
◆ Highlights of the week
Nvidia reported spectacular Q1 earnings
Last Wednesday, Nvidia reported its first-quarter earnings for its fiscal 2021:
EPS: $3.66 reported vs $3.28 estimated
Revenue: $5.66b reported vs $5.41b estimated
The substantial year-over-year growth of 84% in revenue had sent the stock surging higher and thus finishing the week by climbing 8.36% from a week ago.
What got the investors most exciting was the massive growth in its GPU sector amid the global chip shortages crisis. Back in February this year, the company introduced a new product line - CMP card, which is dedicated to cryptocurrency mining in the hope of protecting against the shortages of its GPU supplies in the gaming sector.
The new product line had already brought in $155 million in revenue in Q1, while the company is expecting sales of $400 million in the current quarter, both of which are spectacular numbers for a fairly recent, non-flagship product line.
Its gaming GPU didn’t disappoint at all amid having supplies issues for months. With its consumer graphic cards getting sold out consistently every month, the company reported $2.76b in revenue in its gaming processors sector, which is 106% from a year ago.
The company insists that it still see great demand from the gaming sector. All in all, it remains one of the most exciting companies to invest in nonetheless.
GM surged as factories restarted and a new partnership established.
General Motors Company is reportedly restarting productions in several assembly plants worldwide that were initially idled due to global semiconductor shortage. This is a sign of recovery in its microchip supply bottleneck that had impacted the auto industry for a very long time. Sure enough, the stock surged higher following the report by closing 4.57% higher by the end of last week.
Also, on a side note, GM is reportedly working with the aerospace firm Lockheed Martin to develop a new type of lunar rover for NASA to use in its upcoming Artemis mission, which aims to send astronauts back to the lunar surface by 2024.
“Surface mobility is critical to enable and sustain long-term exploration of the lunar surface. These next-generation rovers will dramatically extend the range of astronauts,” Lockheed Martin executive vice president Rick Ambrose.
This will not be GM’s first rodeo, given that it had served as a major subcontractor that helped Boeing creating the so-called Lunar Roving Vehicle that was utilized during three Apollo missions on the moon. In this mission, GM officials are conceptualizing it to be an electric vehicle that will operate autonomously on the moon. The future is looking exciting.
Amazon supercharged its streaming ambitions.
Amazon said last Wednesday that it would acquire MGM studio for $8.45b, the second-biggest acquisition deal in Amazon’s history since 2017 when it bought Whole Foods for $13.7b.
While Amazon already has a well-established studio arm that produces contents such as Jack Ryan for its Prime Video streaming service, the company is seeking the potential to expand its TV and film library more than ever before by acquiring MGM’s robust IP catalogue, which includes Bond, Creed, Tomb Raider, Real Housewives, The Handmaid’s Tale, and Fargo.
However, it remains unclear how valuable this acquisition will mean to Amazon’s Prime Video as many of MGM’s franchise properties are dated. For example, it doesn’t fully own the rights to Bond.
“The real financial value behind this deal is the treasure trove of IP,” Mike Hopkins, senior vice president of Prime Video and Amazon Studios
While the company plans to “revision” a lot of the iconic IP from the MGM’s catalogue, only time can tell if spinoffs and remakes are the secret recipes to revive these hit titles like what Disney did with The Mandalorian (after acquiring Lucasfilm a decade ago) or are they going to be an $8b losing bet a lot of investors are worried about.
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