Three Buys and a Bail: Broadcom, Chipotle, Walmart, and Nvidia

Welcome back. Stock splits are certainly back. We're trading some of the biggest ones so far in today's three buys into Bale. Our trader for that is Jeff Kilberg. He's founder and CEO at KKM Financial and a CNBC contributor. Jeff, welcome, we appreciate it. Let's start with Broadcom. They announced A10 for one split and that's stronger than expected earnings report last Wednesday. It takes effect in July. The shares are up 4% today as semis continue to surge and they're up more than 20% since the announcement. Do you think the momentum continues here? I think it does. And Broadcom's a buy for me here because of that momentum. And it's really interesting. We're going to talk about all these stock splits and it's almost like in 2024, Kelly stock splits means buybacks. And fundamentally and for all those years prior to this year, you really haven't had a reason to buy a company due to a stock split when you think about the price being reduced. But at the end of the day, Broadcom has more room to run and it follows that other semiconductor, a little company called NVIDIA, we will see this market move higher. It's up 20% to your point in the last two days, here we are at, you know, 1830 as the 6th largest semi. It almost feels like this name is like at a discount, it's under a trillion dollars. NVIDIA now above $3 trillion, not going to four trillion. Why not buy it on discount? But I think it's more of a momentum play. I do get also excited about the fact that they bought VM Ware and that VM Ware is going to help them be a little more diversified if the air comes out of the AI balloon and we do see the way they're working towards networking, that's about 40% of their top line. So I get excited about a little bit of diversification real quickly. And a follow up to that, what's your strategy now with NVIDIA itself, Jeff? Well, NVIDIA itself, we're going to get to that at the very end here, I think. But it's interesting to see this parabolic move. They talked about the stocks, but it added $1 trillion with a capital T subsequent to that stock announcement. It's still moving higher. It's like the pedal is stuck to the metal. And I think we're going to, we're going to have a moment in time here. We're going to look back possibly this conversation if it's a day, if it's a week, if it's a month from now. But this is an overbought territory. But these parabolic move moves, they are widow makers. You, you, I beat myself to it. We'll explain in a moment, but let's give to that next. By then, Chipotle, totally different space. They announced A50 to 1 split a while ago. It was the biggest split in NYSE history. This was back in March. They had to wait for a shareholder vote. They're going to split actually in a little about in about two weeks now and the shares are up 20%. Do you stick with the stock here? I think you do. And it's not cheap by any mean, but I want to be a buyer here. Chipotle treated at A4P of 59 times. That's nearest all time high in the last five years. But I think when you think about this company, I know it's almost like a micro cap. Kelly, it's only a $91 billion market capitalization, but I think they're continuing to expand and they're actually eating and stealing McDonald's lunch. If you're going to pay $20.00 for a Happy Meal or a Big Mac, why not buy a 14 or $15 carnitas bowl because the food seems fresher and you're seeing the momentum Chipotle. So this is a name I think continue to move higher. And at $33175, it will make more sense when they had that massive 50 to one stock split. All right? And then we move on to Walmart, which I don't even think of as a stock splitter, but it is. It kicked this whole thing off practically at the end of January, announcing A3 for one split. And the shares are up 20% since then. And they're up 14% since that split took effect at the end of February. And you're sticking with it despite any concerns about the consumer? No, I am. And if the consumer does show a little more weakness because there are some cracks in the consumer, I think Walmart thrives in that situation. So almost buying Walmart or staying with Walmart is almost like a hedge here. But if you think about this name $550 billion company with 10,000 stores globally, they're reaching so many folks. And yes, this is traded in a very high PE compared to its five year average. But I think it makes a ton of sense here because we are seeing 240 million customers served weekly globally. And as they continue to maybe think about a or think about more reach, they have the audience. So I like Walmart here. And if anything, Kelly, it is an offset if we do see for some reason AI air come out of the blue. All right, now let's get to the bail. And I, I should have known that it would be NVIDIA. We talked about it a couple of weeks ago before their earnings. They announced that 10 for one split back in May. The shares are up 40% since then. Since the split took effect this month, they're up another 8%. Don't know if you caught our conversation with Rich Bernstein top of the hour debating this very question. Do you stick with the leadership with the mass of earnings growth or do you go with the rest of the market? You've been clear on your views on NVIDIA. Why are you bailing here? Well, I think you have to look at where everyone is listing on the boat right now. If you look, there are 89 buy ratings, five holes and 0 sell ratings. And this is a company when they talked about their stock split, which was needed, when they talked about their stock split, you saw the market move higher. It's up another 10% since that announcement after it actually split. So here we are added a trillion dollars, Kelly. I think we're so condition to these numbers, but this isn't normal. I've been doing this for 30 years and I know Bob Pisani was talking earlier about XLK. They're going to be rebalancing and moving up. But I think we have to understand if we're buying these names because the retail are going to have access to it. Let's take a step back and remember that the 10% of the wealthiest Americans, they own 93% of the stock market. So I think that retail input is a little bit of a misnomer. I will just tell you this, I was at a fundraising meeting the other night and they said where are we going to get get the money from? And everyone said you should get it from stock profits because that's all people have. And then people are piping up and saying, Oh yeah, all the kids at school, they all own NVIDIA. Yeah. And, and no doubt about it, it has been a phenomenal stock. And it makes a ton of sense to own this. But I think it's some moment in time when we talk about how the rubber meets the road. It stocks up 800%. So I think we have to be consider that the air may come out of the balloon in the NVIDIA.

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