Investors can buy the dip on some key tech stocks after this week’s market losses, according to Eddie Ghabour, Key Advisors Wealth Management managing partner. Stocks declined this week on worries that the AI-powered bull market could get hit by an economic slowdown and historically elevated valuations. Data released Friday showed that consumer sentiment has nearly approached its lowest level ever amid worries about the record-setting U.S. government shutdown. Losses in major tech stocks led the Nasdaq Composite to notch its worst week since April. Ghabour, however, sees this week as a buying opportunity for Tesla , Nvidia and Palantir . Tesla is one of the investor’s top picks, particularly after CEO Elon Musk on Thursday got his historic $1 trillion pay package approved by the majority of Tesla shareholders. The investor believes Tesla stock could break through its all-time high, set in Dec. 2024, and hit $500 per share by the end of this year. That’s more than 16% above the stock’s Friday close of $429.52 per share. Shares lost 5.9% this week. The stock, a laggard among its tech peers, is up 6.4% this year. TSLA 1Y mountain Tesla stock over the past year. “[Musk’s] got a trillion reasons to try to win the AI race, and I think that’s the big difference here when you look at Tesla,” Ghabour said Friday on CNBC’s “Power Lunch.” “… The bulls or bears will debate on whether it’s a car company or an AI tech trade. And obviously, we believe it’s an AI trade,” he said. “As long as we continue to grow in this AI bubble, and you think it’s going to expand into 2026 — like we believe — we’re not gonna bet against Elon.” Investors believe the newly approved pay plan could help turn Tesla into a robotics powerhouse as the company endeavors to gain market share in other areas beyond electric vehicles, which has seen ramping competition. The pay package consists of 12 tranches of shares to be granted to Musk if Tesla hits certain milestones over the next decade, with the first tranche set to be paid out if Tesla reaches a market cap of $2 trillion. Other goals tied to the new plan include Tesla reaching 20 million vehicle deliveries, hitting 10 million active full self-driving subscriptions and delivering 1 million Optimus humanoid robots. “This incentive-based concept is welcomed by shareholders. So I look at this as a very bullish development for the name, and as long as it’s a bull market, we’ll buying dips,” Ghabour said. Ghabour said he is also buying more Nvidia and Palantir on the weakness, as he holds a six-month view of the names. The stocks are up 40% and 135% this year, respectively. “Nvidia is the most important name in AI as well as in the Nasdaq 100 due to their weighting,” he said. “So if you think the market’s going to go up over the next few months like we do, you want to own the names that are going to carry the most weight. … We think these two are going to have continued massive upside throughout this AI boom.” To be sure, Ghabour said investors should remain nimble when it comes to investing in growth names in the current market landscape. “You’ll want to sell them fast when we do go into a bear market ’cause they will get hit the hardest,” he said. “But right now, we’re going to continue to ride because we don’t think we’ve seen the last leg of this bull market yet.”
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Stocks wind up mixed on Wall Street after spending most of the day in the red
Stocks wavered to a mixed finish on Wall Street on Friday and notched their first weekly loss in the last four.
Major indexes wobbled throughout most of the week, but ultimately pulled back from records set the prior week. Technology stocks once again determined the broader direction of the market.
The Standard & Poor’s 500 index spent most of the day in the red and was down as much as 1.3%. It ultimately eked out a gain, rising 8.48 points, or 0.1%, to close at 6,728.80. The Dow Jones industrial average made a similar reversal and rose 74.80 points, or 0.2%, to close at 46,987.10.
The technology-heavy Nasdaq was down as much as 2.1% at one point during trading, but recovered most of the losses. It fell 49.46 points, or 0.2% to 23,004.54.
The market was weighed down by technology stocks, especially several big names with huge valuations that give them outsize influence over the direction of the market. Google’s parent company, Alphabet, fell 2.1% and Broadcom fell 1.7%.
Wall Street remained focused on the latest quarterly reports and forecasts from U.S. companies.
Payments company Block, which operates the Square and Cash App businesses, sank 7.7% after turning in results that fell short of forecasts. Exercise equipment maker Peloton jumped 14.2% after its results beat estimates.
Expedia Group surged 17.5% after beating analysts’ quarterly earnings forecasts.
More than 90% of companies within the S&P 500 have reported earnings for their latest quarter. Most companies have reported growth beyond Wall Street expectations and the influential tech sector has the strongest growth, according to data from FactSet.
Corporate profits and forecasts were already being scrutinized by Wall Street as investors try to gauge whether the market’s overall high value is justified. The results have taken on more significance amid a lack of other data about the economy because of the U.S. government shutdown, which is now the longest on record.
The shutdown is now responsible for yet another missing economic report typically relied on by Wall Street and economists. The monthly employment data for October were unavailable, as were the monthly data for September previously. The lack of data on employment is especially troubling because the job market was already weakening.
Wall Street still has several private sources of economic data to turn to, outside of earnings. The latest came Friday from the University of Michigan, with its monthly consumer sentiment report. The latest report showed that consumer sentiment fell sharply from a month ago and hit a three-year low. Economists had expected a slight increase.
“Consumers are starting to get concerned about the potential effects of the government’s shutdown on economic activity,” Eugenio Aleman, chief economist for Raymond James, wrote in a note to investors.
The survey also showed that inflation expectations edged slightly higher. Government data on consumer prices and other measures of inflation are among the information Wall Street and others lack because of the government shutdown. Inflation has been stubbornly high and remains a key concern, especially amid a volatile U.S. trade war that could add fuel to rising inflation.
The lack of inflation and employment data is a problem for the Federal Reserve, which has signaled a more cautious approach on interest rate cuts moving forward. Wall Street’s big gains this year have been partly due to anticipation for interest rate cuts, which can help stimulate the economy by making loans less expensive.
The Fed has already cut its benchmark rate twice this year as it tries to counter the effect that a weakening employment market could have on economic growth. Cutting rates could worsen inflation at a time when levels are stubbornly higher than the central bank’s 2% goal, however.
Wall Street is still mostly betting that the Fed will cut interest rates at its December meeting. Investors are forecasting a 67% chance of another interest rate cut, according to CME FedWatch.
Treasury yields held steady in the bond market. The yield on the 10-year Treasury remained at 4.09% from late Thursday. The yield on the two-year Treasury held at 3.56% from late Thursday.
Markets in Europe fell and markets in Asia closed lower. China reported that its exports contracted 1.1% in October, as shipments to the United States dropped by 25% from a year earlier. But economists expect Chinese exports to recover after President Trump and Chinese leader Xi Jinping agreed last week to de-escalate the trade war between the two largest economies.
Troise writes for the Associated Press.
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