US-Iran tensions flare up again: How will Strait risks impact assets?
US and Iran reach consensus; how will NVIDIA's earnings tonight impact the memory chip sector? Avoid chasing rare earth stocks at high levels!
Let's first look at the biggest positive market news from yesterday! 1. UnderPakistan's mediation, the US and Iran have reached a new consensus on the terms of the latest round ofceasefire agreement. One veryimportant aspect is ensuring the restoration of free navigation in the Strait of Hormuz.Following this news, international oil prices saw a significant correction,, which was also one of the key reasons for the rebound in overall risk appetite in the US stock market yesterday.Therefore, at least from a macro perspective, the short-term downward pressure on the market from the Middle East situationis marginally easing。 $Nasdaq Composite Index (.IXIC.US)$
$NVIDIA (NVDA.US)$ 2. After today's market closeNVIDIA will also release its latest quarterly earnings report, with the market currently expecting NVIDIA's revenue for the previous quarterto reach USD 92-95 billion, but the key focus should not beon whether the stock price rises or falls after the earnings releasebecausePost-earningsThe stock price performanceis itself influenced by factors such as expectation gaps, valuation, and guidanceMany factors are at play. The key focus should beon whether NVIDIAcan sustain its high valuation.Revenue growthAs long as NVIDIA'soverall revenue continues to grow at a robust pace,it indicates that major tech companies' investment in AI infrastructurehas not significantly slowed down.And as long as AI-relatedcapital expenditure does not decelerate,it will benefit not only NVIDIA itselfIt will also indirectly benefit memory chips, optical modules, and the broader AI hardware ecosystem.
$NVIDIA (NVDA.US)$ 2. After today's market closeNVIDIA will also release its latest quarterly earnings report, with the market currently expecting NVIDIA's revenue for the previous quarterto reach USD 92-95 billion, but the key focus should not beon whether the stock price rises or falls after the earnings releasebecausePost-earningsThe stock price performanceis itself influenced by factors such as expectation gaps, valuation, and guidanceMany factors are at play. The key focus should beon whether NVIDIAcan sustain its high valuation.Revenue growthAs long as NVIDIA'soverall revenue continues to grow at a robust pace,it indicates that major tech companies' investment in AI infrastructurehas not significantly slowed down.And as long as AI-relatedcapital expenditure does not decelerate,it will benefit not only NVIDIA itselfIt will also indirectly benefit memory chips, optical modules, and the broader AI hardware ecosystem.
Let's first take a look at memory chips. $SK hynix (SKHY.US)$$Micron Technology (MU.US)$
Although both SK Hynix and Micron saw some rebound yesterday,compared to other hot themes,the memory sector's performance yesterdaywas actually not that significant.
SK Hynix's share price has returned to around $160, while Micron's share price remains at $930.For those who entered the memory trade early with me,I believe there is no needto make any moves at this point.Continue to hold with patience, becauseour earlier entry into the memory sectoritselfwas not about trading the ups and downs of NVIDIA's earnings report,，but rather trading the continued growthin AI hardware demand,as well as the expectation that the memory industry's prosperitycan remain at high levels. Therefore, whether it is SK Hynix or Micron,as long as your overall position size is manageable,I believe that at this stage,there is no need to react to short-term volatilityAvoid frequent trading; hold your positions patiently and wait for gains. However,for those who are completely out of the tech sector,friends, ifyou are concerned about other high-beta tech themes,then memory chips remain, in my view, the tech theme with the highest industry prosperity and earnings certainty.You can still look for opportunitiesto enter SK Hynix or Micron in tranches.
Having discussed memory chips, which offer relatively high certainty, let's now look atone of the directions where short-term capital is most active:which israre earth
4. YesterdayDriven by high-beta, small-cap stocks like CRML,the entire rare earth sector saw another significant surge.Since mid-August,judging from the overall performance of thematic plays in the market,aside from cryptocurrencies,In addition,rare earths have been one of the few hot sectors where capital has repeatedly rotated back in for trading.Many friends have privately asked me,is it still worth chasing rare earth stocks?So myview is that it is tradable,，but only as a hot spot where capital clusters around the limit-up stocks,rather thannot by buying at the bottomas a preemptive position, becausefrom an industrial perspective,rare earths themselves are certainly fine;as very important upstream raw materials for many semiconductor equipmentand high-end manufacturing sectors, the industry's overalllong-term demand and prosperityStill worth watching, but nowthe biggest issueIt's just thatis that the stock price is no longer low,and currentlymany rare earthindividual stocks' positionsand storage optical modulesare similar to those AI hardware stocks that rallied earlier; they have allreached the mid-to-high range,so nowIf you still want to participate in the rare earth sector,tradingit is not about low valuations,but rather whether short-term capital will continue to cluster together.If you still wish to engage in the rare earth space now,I would actually advise against chasing high-beta stocks with smaller market caps. Instead, I am more inclined to consider MP. $MP Materials (MP.US)$
4. YesterdayDriven by high-beta, small-cap stocks like CRML,the entire rare earth sector saw another significant surge.Since mid-August,judging from the overall performance of thematic plays in the market,aside from cryptocurrencies,In addition,rare earths have been one of the few hot sectors where capital has repeatedly rotated back in for trading.Many friends have privately asked me,is it still worth chasing rare earth stocks?So myview is that it is tradable,，but only as a hot spot where capital clusters around the limit-up stocks,rather thannot by buying at the bottomas a preemptive position, becausefrom an industrial perspective,rare earths themselves are certainly fine;as very important upstream raw materials for many semiconductor equipmentand high-end manufacturing sectors, the industry's overalllong-term demand and prosperityStill worth watching, but nowthe biggest issueIt's just thatis that the stock price is no longer low,and currentlymany rare earthindividual stocks' positionsand storage optical modulesare similar to those AI hardware stocks that rallied earlier; they have allreached the mid-to-high range,so nowIf you still want to participate in the rare earth sector,tradingit is not about low valuations,but rather whether short-term capital will continue to cluster together.If you still wish to engage in the rare earth space now,I would actually advise against chasing high-beta stocks with smaller market caps. Instead, I am more inclined to consider MP. $MP Materials (MP.US)$
MP, as a player in the rare earth sectorMP has a relatively larger market cap,and its stock pricestabilityis better.If you are determined to participate,Iit is advisable to adopt a two-tranche entry strategy.，Consider placing the initial positionaround$58,but do not deploy your full capital at once. Ifcapital inflows fail to sustain momentum later onand MP undergoes a secondary correction,wait for the stock price to retrace to $50before executing the second trade. Structurally, as long as $50 is not effectively breached, MP maintains an overall oscillating upward trend.The upside target remains at $70.
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