By Nigam Arora & Dr. Natasha Arora

To gain an edge, this is what you need to know today.

Nvidia Earnings

Please click here for a chart of Nvidia stock (NVDA).

Note the following:

  • The Morning Capsule is about the big picture.  The chart of NVDA stock is being used to illustrate the point.
  • The chart shows the gap up in NVDA stock after earnings.
  • The chart shows that NVDA stock has broken out from a technical perspective.
  • RSI on the chart shows that even though NVDA stock is overbought, there is more room to run.
  • Nvidia reported earnings significantly better than the consensus but in line with the whisper numbers.  Stocks move  based on the difference between whisper numbers and the reported numbers.  Whisper numbers are the numbers that analysts privately share with their most important clients.  Whisper numbers are different from the numbers that the same analysts publish for the public.
  • Here are the key points from Nvidia earnings:
    • Nvidia reported Q1 earnings of $6.12 vs. $5.59 consensus. Whisper numbers were $6.
    • Nvidia reported revenues of $26B vs. $24.65B consensus.  Whisper numbers were $26B.
    • For the current quarter, Nvidia sees revenues of $28B vs. $26.66B consensus.  Whisper numbers were $28B.
  • One of the factors driving NVDA stock higher is the announcement of a 10 for 1 split.  The split will be effective after the close on June 7.  A stock split does not add any value, but retail investors are conditioned to buy on stock splits.
  • In The Arora Report analysis, an important item for prudent investors is that Nvidia will start generating revenue from Blackwell this year.  This is important because it reduces the risk of revenue drop during the transition to Blackwell.  
  • In The Arora Report analysis, two hidden gems are AI factories and sovereigns.  In The Arora Report analysis, Wall Street is underestimating revenues from AI factories and sovereign countries.  Sovereign countries will move their national data to AI.  Nvidia is working with over 100 customers to build AI factories.
  • In The Arora Report analysis, here are the risks facing Nvidia:
    • Growth in China is slowing as the China market has become very competitive.
    • Nvidia’s major customers such as Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOG, GOOGL), and Meta (META) are developing their own chips to compete with Nvidia.
    • This was the last quarter for Nvidia where comparison to prior quarters was easy.  Going forward, comparisons will become more difficult because Q1 2023 was the last quarter before orders surged.
  • The Arora Report has raised the very long term target on NVDA stock to $1438 – $1473.  You may recall that members of The Arora Report bought NVDA stock at an average price of $125.51 using Arora buy zones, a technique new members can also take advantage of.  Along the way, The Arora Report targets were higher than a vast majority of analysts.  That call has proven spot on.
  • For NVDA stock, the Arora Report has also issued a new Buy Now rating for those following the Good Way, a new buy zone for those following the Best Way, and a new recommended quantity for those not in NVDA stock.
  • The Arora Report has also issued a signal for a trade around position on NVDA.  Trade around positions is a technique used by billionaires that can dramatically increase returns and reduce risks.
  • Other AI stocks such as AMD (AMD), Super Micro Computer (SMCI), Taiwan Semiconductor (TSM), Vertiv (VRT), Micron (MU), and Applied Materials (AMAT) are moving higher on Nvidia earnings.
  • FOMC minutes are a disappointment to momo gurus.  The minutes show that several Fed officials are wondering if the policy is restrictive enough.  
  • Jobless claims came at 215K vs. 219K consensus.  This indicates that the jobs picture is staying strong.
  • As an actionable item, the sum total of the foregoing is in the protection band, which strikes the optimum balance between various crosscurrents.   Please scroll down to see the protection band. The protection band is one of the large number of unique edges that are available to members of The Arora Report.

Holiday Schedule

Leading into the Memorial Day holiday, we will be on a reduced schedule.  The next capsule will be on Wednesday, May 29.  Other posts will be done as needed.

Magnificent Seven Money Flows

In the early trade, money flows are positive in Nvidia (NVDA), Amazon (AMZN), , Microsoft (MSFT), Alphabet (GOOG), Meta (META), Tesla (TSLA), and Apple (AAPL).

In the early trade, money flows are positive in S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ).

Momo Crowd And Smart Money In Stocks

The momo crowd is *** (To see the locked content, please take a 30 day free trial) stocks  in the early trade.  Smart money is selectively *** stocks in the early trade.

Note for new investors: Smart money often sells into the strength generated by momo crowd buying and buys into the weakness generated by momo crowd selling.  Over a long period of time, investors come out ahead by adopting smart money’s ways.  The exception is in a raging bull market – for very, very short term trades, consider following the momo crowd and not smart money.


The momo crowd is *** gold in the early trade.  Smart money is *** in the early trade.

For longer-term, please see gold and silver ratings.


The momo crowd is *** oil in the early trade.  Smart money is *** in the early trade.

For longer-term, please see oil ratings.


Bitcoin (BTC.USD) is range bound as investors are excited about a potential ether ETF.  .


Our very, very short-term early stock market indicator is ***.  This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.


Interest rates are ticking down, and bonds are ticking up.

The dollar is weaker.

Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.

Gold futures are at $2370, silver futures are at $30.91, and oil futures are at $78.29.

S&P 500 futures are trading at 5367 as of this writing.  S&P 500 futures resistance levels are 5400, 5500, and 5622: support levels are 5256, 5210, and 5020.

DJIA futures are up 92 points.

Protection Band And What To Do Now

It is important for investors to look ahead and not in the rearview mirror.

Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider holding *** in cash or Treasury bills or allocated to short-term tactical trades; and short to medium-term hedges of ***, and short term hedges of ***. This is a good way to protect yourself and participate in the upside at the same time.

You can determine your protection bands by adding cash to hedges.  The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive.  If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.

A protection band of 0% would be very bullish and would indicate full investment with 0% in cash.  A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.


It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.  When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks.  High beta stocks are the ones that move more than the market.

Traditional 60/40 Portfolio

Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.

Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of seven year duration or less.  Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.

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Picture of Nigam Arora

Nigam Arora

Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.

Picture of Dr. Natasha Arora

Dr. Natasha Arora

Dr. Natasha Arora has significant expertise in investment analysis especially biotech, healthcare, and technology. Natasha is a graduate of Harvard Medical School followed by a postdoc at MIT. She has published several peer reviewed research papers in top science journals.

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