Stocks have been on a rollercoaster ride in recent months, with the S&P 500 nearing its all-time high in September after a rebound in the final weeks of August. However, the market landscape has shifted significantly since July, with some of the top-performing stocks facing challenges in recovering from recent sell-offs. Investors are now turning their attention to dividend-paying and rate-sensitive stocks as they anticipate interest rate cuts by the Federal Reserve.
As the Fed is expected to lower rates at its September meeting, the big question mark hanging over the markets is the extent of the rate cuts and whether the AI trade can regain its momentum. In this volatile environment, investors are looking for stock picks that could lead market trends or experience significant price movements in September.
### Nvidia
Nvidia (NVDA) recently reported solid quarterly earnings, but the results fell short of investors’ high expectations. The market’s lukewarm response to Nvidia’s earnings reflects concerns about the AI sector and the company’s rapid rise. Big tech players like Microsoft, Alphabet, Amazon, and Meta have been investing heavily in AI data centers, with a combined expenditure of $58.5 billion in the second quarter. While Nvidia has benefited from this spending spree, doubts about the long-term payoff of AI investments have weighed on the stock in recent months.
After a year and a half of impressive growth, Nvidia is now held to a higher standard by investors. The company’s forecast for the current quarter, while slightly above Wall Street estimates, did not match the double-digit percentage beats it had delivered in previous quarters. Nvidia’s performance in September will likely hinge on how persistent the doubts about AI’s potential are among investors.
### Apple
Apple (AAPL) is gearing up to launch its new AI-enabled iPhone model, the iPhone 16, at an event on September 9. The company faced challenges earlier this year, with concerns about sluggish iPhone sales and uncertainty surrounding its AI strategy weighing on the stock. However, Apple’s unveiling of Apple Intelligence, its custom AI system, in June has sparked a resurgence in the stock.
Apple Intelligence is expected to drive a massive upgrade cycle as existing iPhone owners trade in their devices for newer models. Analysts predict that millions of iPhone users who haven’t upgraded in years could fuel a surge in iPhone sales in the coming years. The upcoming product launch in September will be crucial for Apple to generate excitement about Apple Intelligence and set the stage for a successful holiday season.
### Alphabet
Google parent Alphabet (GOOG; GOOGL) is facing its second antitrust case of the year as it battles the Department of Justice (DOJ) in September. The DOJ and eight states filed a lawsuit earlier this year accusing Google of monopolizing the digital advertising technology market. The trial, scheduled to begin on September 9, could shed light on some damaging revelations and impact Alphabet’s stock performance.
Alphabet investors are hoping for a better outcome in this case than the previous one, where a judge ruled that Google had illegally monopolized the online search market. The possibility of a breakup of Google looms large, as the trial unfolds. The outcome of this case could have significant implications for Alphabet and its shareholders.
### Broadcom
Semiconductor giant Broadcom (AVGO) is set to report quarterly earnings on September 5, which could test the stock’s impressive gains so far this year. Broadcom’s shares have surged 46%, driven by enthusiasm for AI technology. The company’s recent additions of major AI chip customers have bolstered investor confidence in the stock.
Broadcom executives have projected a significant opportunity in the AI semiconductor market, with estimates exceeding $150 billion over the next five years. Reports of new client acquisitions, including OpenAI, have fueled optimism about Broadcom’s growth potential. Investors will be closely watching the earnings report for confirmation of these reports and signs of continued success in the AI sector.
### Kroger
The fate of the largest grocery store merger in the US hangs in the balance as Kroger (KR) faces an antitrust lawsuit filed by the FTC and several states. The proposed $25 billion merger with rival Albertsons (ACI) is under scrutiny in a federal court in Portland, Oregon. The FTC alleges that the merger would harm competition and lead to higher grocery prices, while Kroger and Albertsons argue that it would enhance competition and lower prices.
The outcome of the federal hearing in September could determine the future of the merger, with the FTC seeking to delay the deal pending further review. Kroger’s legal battle with the FTC underscores the challenges of consolidation in the retail sector and the complexities of antitrust regulations. The resolution of this case will have far-reaching implications for Kroger, Albertsons, and the grocery industry as a whole.
In conclusion, September promises to be a pivotal month for the stock market, with key events and developments shaping investor sentiment and market trends. As uncertainties loom over interest rates, AI investments, product launches, antitrust cases, and corporate mergers, investors must stay vigilant and informed to navigate the volatile market landscape. The performance of stocks like Nvidia, Apple, Alphabet, Broadcom, and Kroger will be closely watched in the coming weeks, offering valuable insights into the current state of the market and the opportunities and challenges ahead.
