BUZZ Investing: U.S. Stocks Rally As Nvidia Climbs Higher

BernardaSv The stock market surged due to weaker-than-expected jobs and CPI reports, boosting investor confidence. Nvidia led the gains, soaring over 41% thanks to strong earnings and a stock split announcement. U.S. domestic markets experienced significant gains during the recent period between Index selection dates (May 9, 2024 – June 12, 2024, the “Period”). Equity markets rallied following a weaker-than-expected jobs report and a softer CPI report. The April CPI report released on May 15th showed a year-over-year gain of 3.4%, lower than the previous month, reinforcing hopes that inflation was being effectively controlled. These factors combined created a bullish environment for stocks, as investors anticipated a more accommodative monetary policy. The bond market gained, highlighted by 2-year treasury note yields, which fell by 7 bps, closing the Period at a yield of 4.75%. The BUZZ NextGen AI US Sentiment Leaders Index (the “BUZZ Index”) gained 4.5% during the Period. The BUZZ Index returned 5.37% during the month of May compared to a return of 4.96% for the S&P 500 Index during the same period. Year-to-date, the BUZZ Index slightly lags the S&P 500 with returns of 11.07% and 11.30%, respectively, as of the end of May. Shares of NVIDIA Pace Advancing Stocks within the BUZZ Index Shares of NVIDIA Corporation (NVDA) led advancers within the BUZZ Index, soaring over 41% during the recent Period and pushing its market capitalization past $3 trillion. This surge followed the company’s May 22nd earnings report, which exceeded expectations. Nvidia posted a record Q1 2024 revenue of $26.0 billion, up 262% year-over-year and 18% from the previous quarter, driven by a 427% increase in its data center segment revenue to $22.6 billion due to strong demand for AI and high-performance computing solutions. Additionally, Nvidia’s announcement of a 10-for-1 stock split, aimed to improve liquidity and make Nvidia’s shares more affordable to retail investors, was well received as investors continued to cheer the company’s strong market position and growth potential. Shares of Robinhood Markets (HOOD) contributed to BUZZ Index gains, surging 37% during the Period as investor interest in meme stocks was reignited. This resurgence followed Keith Gill, also known as “Roaring Kitty,” posting on X for the first time since the peak of the 2021 meme stock frenzy. His posts about GameStop (GME) sparked a dramatic rally in the stock and revived the perception that social media-driven retail trading might be making a comeback. Top BUZZ Index Contributors: May 9, 2024 – June 12, 2024 Company Ticker Average Weight (%) Return Contribution (%) NVIDIA Corp NVDA 3.50 1.24 Robinhood Markets Inc HOOD 3.17 1.02 MicroStrategy Inc MSTR 3.50 0.74 Coinbase Global Inc COIN 3.08 0.66 Apple Inc AAPL 3.10 0.47 Rivian Automotive Inc RIVN 2.45 0.39 Palantir Technologies Inc PLTR 2.99 0.37 Micron Technology Inc MU 1.25 0.32 Meta Platforms Inc META 2.92 0.21 Microsoft Corp MSFT 2.53 0.17 Click to enlarge Source: BUZZ Holdings ULC, Bloomberg. Past performance is no guarantee of future results. Index performance is not illustrative of fund performance. Not intended as a recommendation to buy or to sell any of the securities mentioned herein. Trump Media & Technology Group Corp (DJT) was the top detractor to BUZZ Index performance during the Period. Several key factors may have contributed to its share price’s recent decline, including recently revised financial statements, which uncovered financial inconsistencies after a re-audit by a new firm. At the same time, the company reported significant net losses for 2023, exacerbating worries about its financial stability. Finally, the conviction of former President Donald Trump in a hush money trial may have further damaged investor confidence. Shares of Paramount Global (PARA) detracted from BUZZ Index performance after Shari Redstone’s National Amusements ended talks with Skydance Media for a controlling stake due to failing to reach acceptable terms. This development is the latest in a prolonged saga for control of Paramount, known for its extensive portfolio of television networks, film studios, and streaming services. Bottom BUZZ Index Contributors: May 9, 2024 – June 12, 2024 Company Ticker Average Weight (%) Return Contribution (%) Trump Media Tech Group DJT 2.00 -0.61 Paramount Global PARA 2.86 -0.47 Viking Therapeutics Inc VKTX 0.82 -0.38 Celsius Holdings Inc CELH 0.93 -0.25 Snowflake Inc SNOW 1.14 -0.16 Super Micro Computer Inc SMCI 2.99 -0.14 Carvana Co CVNA 1.61 -0.14 DraftKings Inc DKNG 1.15 -0.14 Block Inc SQ 0.98 -0.13 Lululemon Athletica Inc LULU 0.68 -0.10 Click to enlarge Source: BUZZ Holdings ULC, Bloomberg. Past performance is no guarantee of future results. Index performance is not illustrative of fund performance. Not intended as a recommendation to buy or to sell any of the securities mentioned herein. BUZZ Index June 2024 Rebalance Highlights Unity Software Inc Unity Software Inc. (U) is the creator of the Unity Engine, one of the most widely used design platforms in the game development industry. The Unity kit allows less-specialized developers to create complex content, ranging from mobile apps to full-scale 3D games. It was the emergence of the iPhone in 2007 that helped propel the company to dominance, as the ease with which apps could be created with Unity’s engine was unparalleled. By 2012, it was estimated that half of mobile game developers were using Unity. Despite Unity’s market dominance, the company has made repeated blunders since its IPO in 2020, culminating in its disastrous decision last year to charge developers based on the number of installations of their software. The backlash was severe and greatly damaged Unity’s reputation, resulting in their former CEO stepping down and a round of layoffs. Last month, Unity announced a new permanent CEO and proposed “resetting” the company in an attempt to rebuild. The stock, down 60% YTD, may be becoming increasingly attractive from a value perspective, while positive investor sentiment jumped following the company’s management reshuffle. This month, U is the largest addition in the BUZZ Index, with a maximum 3% weight. On Holding AG This month, the BUZZ Index features a first-time entrant, On Holding AG (ONON), makers of the On-branded line of running shoes. Founded by competitive runner Olivier Bernhard in 2010, the Swiss brand quickly gained credibility, with its shoes being adopted by many of the country’s top athletes. Within a decade, On captured almost half of Swiss running shoe market share. As word of the shoe’s performance spread, the company expanded internationally, evolving into a lifestyle brand and collaborating with fashion designers. The onboarding of Roger Federer as a shareholder and face of the company in 2019 catapulted On’s popularity, and the company eventually went public in 2021. Shares of ONON are up 50% so far this year as the brand continues to gain momentum in the US, and sentiment has also been on the rise. ONON joins the BUZZ Index this month with a 0.49% weight. Important Disclosures Company data is the source for all particular company information quoted. Definitions: The S&P 500 is a stock market index of 500 of the largest companies listed on stock exchanges in the United States. The Nasdaq Composite Index is a stock market index that consists of the stocks that are listed on the Nasdaq stock exchange. U.S. Treasury Bond Current 2-Year Index is a one-security index comprising the most recently issued 2-year U.S. Treasury note or bond. U.S. Treasury Bond Current 5-Year Index is a one-security index comprising the most recently issued 5-year U.S. Treasury note or bond. Markit CDX North America High Yield Index represents one hundred liquid North American entities with high yield credit ratings as published by Markit. 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