Wall Street Lunch: Nvidia On Top

Summary:

• Nvidia is Piper Sandler’s top large-cap pick due to its strong position in the growing AI accelerator market, with a $175 price target.
• Block is expected to gain from the shift to electronic payments, driven by its innovative segments, Square and Cash App.
• Evercore ISI predicts the S&P 500 could reach 6,600, with the Russell 2000 outperforming large-caps due to moderating inflation and easing financial conditions.

Listen below or on the go on Apple Podcasts and Spotify

Piper Sandler makes NVDA its top large-cap stock pick. (0:15) Amazon looking at smart glasses for drivers to save time. (2:45) Animal Spirits could lift S&P to 6,600. (3:32)

This is an abridged transcript of the podcast.

Our top story so far, Nvidia (NASDAQ:NVDA) is in the spotlight as Piper Sandler named the stock its top large-cap pick due to its “dominant positioning” in the AI accelerator market.

Analyst Harsh Kumar said: “Our viewpoint is rooted in the belief that the overall (total addressable market) for AI accelerators will continue to rise in 2025 by ~$70 billion, and we see NVDA well positioned to capture most of the incremental TAM increase while ceding only a small bit to its merchant chip competitors.”

“In terms of other gainers, we only see Broadcom (AVGO) as making further incremental progress in this market.” Kumar added. He has an Overweight rating on Nvidia and a $175 price target.

Kumar also said the capex trends at the big hyperscalers, such as Amazon (AMZN), Microsoft (MSFT), and Meta (META), continue to be “favorable.”

“All else equal, we see at least sustained levels of capex through 2025, if not accelerated with a shift towards chips & servers and spend away from buildings and other fixed property,” he said. “We think this clearly benefits NVDA in the near to mid-term future and as such, we are taking our numbers up slightly for the January quarter and subsequent FY26 quarters.”

In today’s trading, stocks are mixed with trading lighter than usual. The bond market is closed for Veterans Day.

But the crypto momentum continues, with Bitcoin (BTC-USD) hitting another record high.

Among active stocks today, Monolithic Power Systems (MPWR) is plunging after Edgewater Research said its allocation to Nvidia’s Blackwell line of GPUs is “at risk.”

“Performance issues with MPWR’s (voltage regulator module/Power Management IC) appear likely to severely limit or eliminate MPWR’s allocation in Blackwell, with Renesas taking over B200 and (Infineon) assuming GB200 allocation as both are seen receiving rush orders in recent weeks,” analysts said.

Shares of Humana (HUM) are under pressure after Cigna (CI) confirmed it won’t pursue a combination with the managed care insurer.

Cigna said: “In light of recent and persistent speculation, The Cigna Group expects to communicate that the company is not pursuing a combination with Humana Inc. The Cigna Group remains committed to its established M&A criteria and would only consider acquisitions that are strategically aligned, financially attractive, and have a high probability to close.”

Piper Sandler assumed coverage of Block (SQ) with an Overweight rating.

Analyst Arvind Ramnani said: “Block should benefit from a continued secular shift to electronic payments, as well as being on the forefront of innovation, organized around its two business segments, which are centered around merchants/sellers (Square) and consumers (Cash App).”

In other news of note, in an effort to cut delivery times and help navigate drivers through obstacles, Amazon (AMZN) is developing smart glasses to direct its drivers through the “last 100 yards.”

Reuters says the glasses would guide delivery drivers with turn-by-turn navigation through an embedded screen and free drivers from having to use hand-held navigation.

The effort to speed up delivery times—even by just seconds—underlines Amazon’s aim to outperform Walmart (WMT) as the retail giant takes its own initiatives to compete directly with Amazon’s same-day delivery option.

Amazon currently delivers more than 66,000 packages per hour. Last year, it increased the number of same-day or next-day packages to Prime members by 65% to 7 billion compared to 4.4 billion by Walmart. Of those 4.4 billion, 20% were delivered in under three hours.

And in the Wall Street Research Corner, Evercore ISI says the “animal spirits” in the market could drive the S&P 500 (SP500) to 6,600 by the end of June 2025.

In addition, the Russell 2000 (IWM) should continue to outperform large-caps with a “catch up” trade.

Julian Emanuel, chief equity, derivatives, and quant strategist, says: “Moderating inflation, easing financial conditions coupled with tight credit spreads support the Russell 2000, which trades below its average premium to the S&P 500.”

The Russell 2000 trades at a 19% premium to the S&P 500, which is below its 32% average premium over the past 10 years.

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

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