CPU Fever

Please click here for an enlarged chart comparing NVIDIA Corp (NASDAQ:NVDA) and Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC)

Note the following:

  • The chart shows that king of AI NVDA has returned 20.11% year to date.
  • The chart shows that commodity ETF PDBC has returned 46.39% year to date.  PDBC’s return is 131% of NVDA’s return.
  • The chart illustrates how diversifying beyond AI increases returns and lowers risks.  Higher return with lower risk is the holy grail of investing.  
  • At this time when most portfolios are very heavy in AI positions, prudent investors should take time to review their portfolios for adequate diversification beyond AI stocks.  In our analysis, if there is a market downturn because AI deployment slows or AI monetization does not live up to expectations, diversification within AI will not help as all AI stocks will go down together.  
  • As a full disclosure, PDBC and NVDA are in our portfolios.
  • CPU fever has gripped the stock market.  The fever was triggered by the popularity of Muse from Meta Platforms Inc (META). While GPUs have been used extensively for LLM training and inference, CPUs are important for AI agents.  Intel Corp (NASDAQ:INTC) and Advanced Micro Devices Inc (NASDAQ:AMD) are the two primary providers of CPUs.  Qualcomm Inc (NASDAQ:QCOM) and Arm Holdings PLC – ADR (NASDAQ:ARM) have also jumped into the business of providing CPUs.  As a full disclosure, taking advantage of the strength in CPU stocks, profits have been taken on a trade around position in INTC.
  • In our analysis, in spite of the uber bullishness about Meta and CPUs, prudent investors should note that for Muse to work well users will need to give Muse access to a multitude of their accounts.  How many users are going to trust AI and give their account information to Muse is yet to be seen.  Amazon.com, Inc. (AMZN) has banned Muse.  On the other hand, Shopify Inc. (NASDAQ:SHOP) will allow Muse for agentic check out. As a full disclosure, META is in our portfolio. The position is long from an average of $49.92. 
  • China is making strides to reduce its dependence on U.S. AI chips ahead of Trump Xi talks.  Alibaba Group Holding Ltd – ADR (NYSE:BABA) is introducing a new powerful AI chip.
  • Of special note for prudent investors is that SoftBank Group Corp – ADR (OTC:SFTBY) is delaying its datacenter unit IPO.  It appears the delay is due to AI safety fears and slowdown talk.  SoftBank is a big investor in ChatGPT maker OpenAI.  In our analysis, the delay will fuel the debate if the stock market is overpricing AI datacenter and chip stocks.  
  • President Trump will address the U.N. General Assembly this morning.  President Trump’s speech may be market moving.
  • Yields are slipping as oil pulls back.  Oil is pulling back on Saudi Arabia restarting the East-West Pipeline.  Prudent investors should note the pipeline is pumping at a low rate and is vulnerable to Houthi attacks.  Also adding to the oil drop is a report that Iran is willing to open the Strait of Hormuz in seven days if the U.S. lifts the naval blockade.

Magnificent Seven Money Flows

Most portfolios are now heavily concentrated in the Mag 7 stocks.  For this reason, it is important to pay attention to early money flows in the Mag 7 stocks on a daily basis.

In the early trade, money flows are positive in Apple Inc (NASDAQ:AAPL), Alphabet (NASDAQ:GOOG),  Microsoft Corp (NASDAQ:MSFT), and Tesla Inc (NASDAQ:TSLA).

In the early trade, money flows are negative in Amazon (NASDAQ:AMZN), Meta (NASDAQ:META), and Nvidia (NASDAQ:NVDA).

In the early trade, money flows are neutral in SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust Series 1 (NASDAQ:QQQ).

Momo Crowd And Smart Money In Stocks

Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (GLD).  The most popular ETF for silver is iShares Silver Trust (SLV).  The most popular ETF for oil is United States Oil ETF (NYSE:USO).

Bitcoin

Bitcoin (CRYPTO: BTC) is seeing buying.

What To Do Now

Consider continuing to hold good, very long term, existing positions and add tactical positions based on signals.

The Arora Report is known for its accurate calls. Most recently, The Arora Report correctly called the rally from recent stock market lows and the 2026 semiconductor decline before a 25% drop in the Semiconductor ETF (SMH). In gold, The Arora Report bought at an average price near $1,105, close to cycle lows, and took partial profits near $5,400, close to cycle highs.. Please click here to get The Arora Report’s insights with the free forever Generate Wealth Newsletter.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.