Heat On Nvidia

Please click here for an enlarged chart of Broadcom Inc (NASDAQ:AVGO).

Note the following:

  • This article is about the big picture, not an individual stock.  The chart of AVGO stock is being used to illustrate the point.
  • The chart shows AVGO stock traded as high as $414.61 in December 2025 as excitement built about custom AI chips from Broadcom that challenged NVIDIA Corp (NASDAQ:NVDA).  Of note is that Broadcom chips provide less functionality than Nvidia chips but perform certain specific tasks well at lower cost.
  • The chart shows a major pullback since the peak, with AVGO trading as low as $295.30.
  • Broadcom reported earnings above consensus but below whisper numbers.  As a result, the stock was initially steady after earnings but later jumped on Broadcom putting heat on Nvidia with a $100B AI revenue projection in FY27.  For reference, Broadcom's Q1 AI revenue came at $8.4B, growing 106% year-over-year, and Broadcom is projecting $10.7B in Q2.
  • Adding to the excitement is a new Broadcom partnership for AI chips with OpenAI.  Broadcom now has six AI chip customers.
  • Yesterday, we shared with you in the Morning Capsule a report that Iran had reached out to the U.S.  This report triggered a big rally in the stock market.  The report turned out to be false, but strong ISM Services data brought in buying and prevented the stock market from retrenching.  ISM Services came at 56.1% vs. 53.9% consensus.  A number above 50 indicates economic expansion, and a number below 50 indicates economic contraction.
  • In the early trade this morning, oil traders are throwing a monkey wrench into the stock market rally.  The stock market rally has been due to the momo crowd's incessant aggressive buying of stocks on the belief that the Iran war will be short lived and every tiny dip in the stock market must be bought.  The monkey wrench is that oil is moving higher this morning – rising oil prices are negative for stocks.  Oil is moving higher this morning as oil traders contemplate a scenario where the war is not short lived.  Iran is claiming it hit a U.S. oil tanker in the Persian Gulf.  Due to rising oil prices, non-momo traders are trimming stocks in the early trade.
  • It is important to keep an eye on the South Korean stock market.  Yesterday, the South Korean stock market bounced back after crashing.  This morning, Ishares Msci South Korea ETF (NYSE:EWY) is pulling back as South Korea warns that the Iran war could disrupt chip supplies.  This may be positive for Micron Technology Inc (NASDAQ:MU).
  • Initial jobless claims came at 213K vs. 216K consensus.

China Gives Up On 5%

All investors should pay attention to China because China is the second largest economy in the world and is striving to replace the U.S. as the world's superpower.  

Historically, in spite of slowing growth, China has resisted setting its GDP growth target below 5%.  Now China is giving up on 5%, setting its 2026 GDP growth target at 4.5% – 5%.  This is the lowest target set by China since 1991.  

When China was growing at about 12% and everyone was bullish on China, we were one of the first, if not the first, to make a bold bearish call that China's supercycle was over.   That call has now proven prescient.  

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 neutral in Apple Inc (NASDAQ:AAPL) and Alphabet Inc Class C (NASDAQ:GOOG).

In the early trade, money flows are negative in Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms Inc (NASDAQ:META), Nvidia (NVDA), Microsoft Corp (NASDAQ:MSFT), and Tesla Inc (NASDAQ:TSLA).

In the early trade, money flows are negative 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 (NYSE:GLD).  The most popular ETF for silver is iShares Silver Trust (NYSE:SLV).  The most popular ETF for oil is United States Oil ETF (NYSE:USO).

Gold

The momo crowd is like a yoyo in gold in the early trade, and this is reflected in gold ETF (GLD), silver ETF (SLV), VanEck Gold Miners ETF (NYSE:GDX), and Global X Silver Miners ETF (NYSE:SIL).  Smart money is inactive in the early trade.

Bitcoin

Yesterday, bitcoin Bitcoin (CRYPTO: BTC) staged a major rally on hopes of favorable legislation.  Prudent investors need to be aware that crypto legislation is hitting a road block as banks refuse to back a White House proposal.

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. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a 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.