Stocks to Watch in September 2024: Key Picks in Tech, Semiconductors, and Consumer Goods
As we approach September 2024, several stocks across various industries and sectors present significant upside potential. This report will analyze key stocks to watch, focusing on the technology, semiconductor, and consumer goods sectors, which are poised for notable movements due to upcoming earnings reports, product launches, and market trends. By synthesizing information from multiple sources, we will identify underlying trends, evaluate expert opinions, and provide actionable insights for investors.
Introduction
Technology Sector
Nvidia (NVDA)
Nvidia, a leading player in the AI and semiconductor space, recently reported quarterly earnings that fell short of high investor expectations. Despite this, the company forecasted current-quarter revenue of $32.5 billion, just 2% above Wall Street consensus. Nvidia’s stock performance is closely tied to sentiment around AI investments, making it a critical stock to watch.
Analysis
Nvidia’s slight revenue forecast above consensus suggests cautious optimism. The company’s leadership in AI technology and its robust product pipeline position it well for future growth. However, the recent earnings miss highlights the high expectations and potential volatility associated with Nvidia’s stock.
Recommendation
Investors should consider a cautious approach, potentially using options strategies such as a 22-delta short strangle to hedge against volatility while maintaining exposure to Nvidia’s long-term growth potential.
Apple (AAPL)
Apple is set to launch the AI-enabled iPhone 16 on September 9, following a challenging start to the year with an 11% decline in Q1. Analysts suggest that up to 300 million iPhone owners are due for an upgrade, potentially leading to sales of up to 240 million iPhones in fiscal 2025.
Analysis
The launch of the AI-enabled iPhone 16 could be a significant catalyst for Apple’s stock. The large base of potential upgraders provides a substantial market opportunity. Additionally, Apple’s continued innovation in AI and other technologies reinforces its position as a market leader.
Recommendation
Investors should consider increasing their exposure to Apple ahead of the iPhone 16 launch. A long position in Apple, combined with protective puts to hedge against downside risk, could be a prudent strategy.
Alphabet (GOOG; GOOGL)
Alphabet faces a second antitrust case starting September 9 regarding monopolization of the digital advertising market. Potential remedies include the divestiture of its ad tech stack, which could significantly impact investor sentiment.
Analysis
The antitrust case introduces significant uncertainty for Alphabet. While the company’s core businesses remain strong, the potential for regulatory action could weigh on the stock. Investors should closely monitor the case’s developments and be prepared for volatility.
Recommendation
A cautious approach is recommended, with a focus on risk management. Options strategies such as a 25-delta short iron condor could provide a balanced risk-reward profile while navigating the regulatory uncertainty.
Semiconductor Sector
Broadcom (AVGO)
Broadcom is scheduled to report quarterly earnings on September 5. The company has seen its shares rise 46% year-to-date, compared to a 24% increase in the PHLX Semiconductor Index. Investors are looking for confirmation of new AI chip customers.
Analysis
Broadcom’s strong year-to-date performance and potential new AI chip customers position it well for continued growth. The upcoming earnings report will be a critical indicator of the company’s trajectory.
Recommendation
Investors should consider a bullish stance on Broadcom, potentially using a 22-delta short strangle to capitalize on expected earnings volatility while maintaining a positive outlook on the stock.
Micron Technology (MU)
Micron Technology is set to report earnings on September 25. The company has experienced a 16.5% year-to-date increase, with a high liquidity rating and strong investor interest.
Analysis
Micron’s performance reflects the broader strength in the semiconductor sector. The upcoming earnings report will provide further insights into the company’s growth prospects, particularly in the memory and storage markets.
Recommendation
A long position in Micron, combined with a 19-delta short iron condor to manage earnings-related volatility, could be an effective strategy for investors.
Consumer Goods Sector
Kroger (KR)
Kroger is involved in a federal court hearing regarding its $25 billion merger with Albertsons, challenged by the FTC over antitrust concerns. The outcome could impact the merger’s future and Kroger’s stock performance.
Analysis
The merger with Albertsons represents a significant growth opportunity for Kroger, potentially enhancing its market position and operational efficiencies. However, the antitrust challenge introduces uncertainty.
Recommendation
Investors should adopt a wait-and-see approach, closely monitoring the court proceedings. A neutral options strategy, such as a 21-delta short iron condor, could provide a balanced exposure to Kroger’s stock.
Deckers Brands (DECK)
Deckers Brands is set to undergo a 6-for-1 stock split effective September 16, 2024. The company’s strong financial performance, with fiscal Q1 2025 revenue up 22% year-over-year, makes it an attractive investment.
Analysis
The stock split could make Deckers more accessible to a broader range of investors, potentially driving demand and stock price appreciation. The company’s robust financial performance further supports its growth prospects.
Recommendation
Investors should consider a long position in Deckers Brands, taking advantage of the stock split and the company’s strong financials. Protective puts could be used to hedge against potential downside risk.
Broader Market Trends and Economic Indicators
PMI Data and Employment Trends
Worldwide manufacturing and services PMI data for August will be closely watched, with a focus on detailed sector updates that could indicate key growth industries. In the US, the August non-farm payroll report is anticipated to show a slowdown in job additions compared to July.
Analysis
PMI data and employment trends will provide critical insights into the broader economic environment. Sectors showing resilience amid slowing job growth and easing inflation pressures may present growth opportunities.
Recommendation
Investors should monitor PMI data and employment trends closely, adjusting their sector allocations based on emerging growth patterns. Diversification across resilient sectors, such as technology and consumer goods, could mitigate risks associated with broader economic uncertainties.
Federal Reserve and Interest Rates
The next Federal Reserve Open Market Committee (FOMC) meeting is scheduled for September 17-18, where discussions will include interest rate decisions influenced by economic indicators such as GDP, inflation, and unemployment.
Analysis
Speculation exists that the Fed may consider multiple rate cuts in 2024, which could impact market sentiment. Lower interest rates could provide a tailwind for growth stocks, particularly in the technology and semiconductor sectors.
Recommendation
Investors should stay informed about the Fed’s decisions and be prepared to adjust their portfolios accordingly. A focus on growth stocks, combined with hedging strategies to manage interest rate-related volatility, could be beneficial.
Conclusion
September 2024 presents a mix of opportunities and challenges for investors. Key stocks in the technology, semiconductor, and consumer goods sectors offer significant upside potential, driven by upcoming earnings reports, product launches, and broader market trends. By adopting a balanced approach, utilizing options strategies for risk management, and staying informed about economic indicators, investors can navigate the volatility and capitalize on growth opportunities.
In summary, Nvidia, Apple, Broadcom, and Deckers Brands are among the top stocks to watch, with strong growth prospects and strategic events on the horizon. Investors should remain vigilant, diversify their portfolios, and employ risk management techniques to optimize their investment outcomes in September 2024.
