Post-Election Gridlock, AI Earnings, and the November Rally

It is Wednesday, November 4th. It’s post-election, and I don’t know about you, but I’m glad the elections are over because it was just an incredible distraction. I really think the importance was overhyped, even though this was a landmark election.

Now Wall Street has what it wants: gridlock. Gridlock is good. Nothing is going to get done over the next two years.

The reason the market opened firm this morning is that Treasury yields were falling. President Trump was very complimentary of the Democrats. He said they fought hard, and he’s going to work with them. So life goes on, folks. It’s time to focus on the holidays.

The bickering about data centers is going to continue, but the expansion is going to be immense because it’s all preloaded to 2032. We can’t stop it. The train has left the station.

I’m sure there are going to be hearings on AI. I’m sure people are going to point fingers and say electricity costs have gone up because of AI. But you can’t stop it. If you want to stop it, you’ve got to ban cell phones, and they’re not doing that.

Obviously, voters sent a message that they’re very unhappy with energy prices. Energy prices are falling now, but it’s temporary because this is the fall, when demand drops. Come February, natural gas is going to go right back up. So I’m not planning on selling any of my energy stocks, just so you know.

Advanced Micro Devices (AMD) came out and announced that sales were up 44.6% and earnings were up 94.7%. But that’s not the big news, folks. The big news is that its data center business surged 97% to a record $8.5 billion.

Even better, AMD is forecasting fourth-quarter revenue of $17 billion, well above analyst estimates. The company just reported $13.38 billion in revenue. So to go from $13.38 billion in the third quarter to $17 billion in the fourth quarter is big news.

Super Micro Computer was the grand finale. Its sales surged 297.5%, and earnings surged 573.1%. That turned out to be a stunning 26.12% sales surprise and a 46% earnings surprise.

Super Micro also raised its guidance. This stock is trading at under six times forecast earnings. With estimates revised higher, it’s probably trading at five times forecast earnings. Folks, the earnings are incredible.

Now, if the stocks go down in the wake of earnings, they’ll bounce right back. There’s nowhere to go, folks.

I’ve had people asking, "Are you going to sell Nvidia? Are you going to sell Micron?" Of course not. There’s nowhere to go.

So enjoy earnings season. November is a seasonally strong month. I would be grossly disappointed if I’m not up over 20% this month.

By the way, you can go to Growth Investor and look at our conservative picks. They’re up over 200% on average, and the fundamentals are better than ever.

So, folks, hang on and enjoy the ride. The strong seasonal period is starting now, and we have a lot to look forward to.