💰 5 Fact Friday: Nvidia, Ethereum, & Metals Soar

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Hey Money Maniacs,

Welcome back! Last week, readers voted on which no-income-tax state they’d rather move to, and the results are in:

1. Florida

2. Nevada

3. New Hampshire

4. Texas

Now, let’s get into this week’s biggest stories in the world of money. Today’s issue covers:

1. Nvidia Adds $200 Billion To Market Cap 🚀

2. Precious Metals Reach Record Highs 📈

3. Target Cuts Prices On Essentials 🎯

4. Ethereum ETFs Get SEC Approval 👀

5. The Key To Getting Rich 💸

1. Nvidia Adds $200 Billion To Market Cap 🚀

The market was on edge, eagerly awaiting Nvidia's earnings report—and the AI giant did not disappoint.

Nvidia ($NVDA) shattered expectations with a reported $26 billion in revenue, marking an 18% increase quarter-over-quarter and a staggering 262% year-over-year growth. Net income? A colossal $14.9 billion, up 621% from last year.

After dropping these earnings, Nvidia's shares surged 9.3%. This move pushed its stock price beyond the $1,000 mark and added a jaw-dropping $200 billion to its market cap—equal to an entire Disney, McDonald's, or American Express.

How did Nvidia pull this off?

• Data Center Dominance: A whopping 87% of their revenue now stems from their data center business, which has seen a 427% year-over-year increase thanks to the AI boom.

• Infrastructure Investment: The surge in demand for Nvidia's GPUs has been driven by tech giants such as Google, Microsoft, Meta, and Amazon, who are heavily investing in AI infrastructure.

• Strategic Moves: The cherry on top? A 10-to-1 stock split announcement and an aggressive $7.7 billion buyback plan.

What’s next for the company?

Nvidia's valuation now floats around a P/E ratio of 60x—substantially higher than the S&P 500's average of 24x.

Despite the expensive price tag, Nvidia’s impressive growth rate may actually justify the premium. (That is, if the company can sustain its growth.)

With its incredible performance, Nvidia has set high expectations and drawn attention from competitors. Companies like Google, Microsoft, and emerging startups are eager to close the technology gap and snag a portion of Nvidia’s 80% market share in AI chips.

However, Nvidia is betting on its upcoming Blackwell chips and expansion across the data center tech stack for its next wave of growth.

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2. Precious Metals Reach Record Highs 📈

This week in metals: gold, silver, and copper prices have surged to new heights.

Gold reached over $2,400 per ounce, marking a 17% increase this year. Silver and copper peaked at a 30% return through Monday, with silver hitting an 11-year high.

Why the spike?

Copper is widely used in electrical wiring and machinery, boosted by data center construction. Plus, the supply of the red metal has hit a 25-year low.

Silver is essential in semiconductor chips and renewable energy hardware.

Gold, as a safe haven asset, tends to rally when U.S. debt rises and geopolitical conflict arises.

But investors should be cautious.

According to analysts Claude Erb and Campbell Harvey, “a high real gold price has been associated with low inflation-adjusted gold returns over the subsequent 10 years.”

Yes, supply and demand imbalances can create windows of opportunity for short-term traders. But long-term investors should be aware that, historically, they have underperformed the stock market.

Metals mostly provide diversification and an inflation hedge. So, as a rule of thumb, limit your total commodity exposure to 5% of your portfolio.

3. Target Cuts Prices On Essentials 🎯

Target has announced a bold move to slash prices on over 5,000 everyday items, joining the ranks of retailers like Walmart, Aldi, and Ikea in a bid to attract budget-conscious consumers.

This decision comes as Target grapples with declining sales and increased competition for shoppers' wallets.

Why the price cuts?

CEO Brian Cornell highlighted that inflation in food and household essentials is squeezing consumers' budgets. Target's same-store sales fell for the fourth straight quarter, prompting the retailer to adjust its strategy.

By reducing prices on staples like milk, meat, bread, soda, and fresh produce, Target aims to draw shoppers back into its stores.

The impact on consumers:

Lower prices on essential items mean significant savings for millions of shoppers. For example, the price of Thomas' Plain Bagels has dropped from $4.19 to $3.79, and Clorox Scented Wipes from $5.79 to $4.99. These reductions are not only in stores but also online and in-app.

The broader context:

Target's move is part of a larger trend where retailers are slashing prices to stay competitive.

McDonald’s and Wendy’s are introducing new meal deals, and other companies like Starbucks and Home Depot are feeling the pinch from weaker discretionary spending.

The big question is whether these price cuts can help combat inflation and boost consumer confidence. What do you think?

4. Ethereum ETFs Get SEC Approval 👀

In a surprise twist yesterday, the SEC approved eight spot Ethereum ETFs. Now, BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton must prepare their S-1 registration statements.

Once the S-1 forms are approved, trading can begin. But this could take anywhere from three weeks to three months.

Although the approvals mark a 180-degree turn from the SEC, we did get a hint of this possibility earlier this week. On Monday, Ethereum ETF applicants were asked to update a key document known as Form 19b-4.

The result? Ethereum's price skyrocketed from $3,047 to $3,694, a wild 21% surge—the largest daily gain in ETH's history.

So, what does this mean for investors?

Well, if the Bitcoin ETF approval earlier this year is any indicator, we're looking at significant inflows of capital.

Why?

ETFs make it easier for institutional investors to dive into Ethereum without the hassle of dealing with digital wallets and private keys.

How much are we talking about?

Bitcoin ETFs brought in an additional 207,000 BTC ($14 billion) beyond the 621,000 BTC ($42 billion) already held in the Grayscale Bitcoin Trust. However, analysts like Bloomberg's Eric Balchunas suggest Ethereum ETFs might only attract 10-15% of this amount.

Still, $5 billion to $8 billion in inflows could only mean one thing. 🚀

After all, Bitcoin ETF inflows drove a 60% rally from ~$46,000 on January 11th (its first day of trading) to an all-time high of nearly $74,000 just two months later.

So buckle up, crypto enthusiasts—this ride is just getting started!

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5. The Key To Getting Rich 💸

Let's talk about a golden rule from Warren Buffett: "The stock market is a device for transferring money from the impatient to the patient."

The recent surge in 401(k) millionaires is a testament to this wisdom.

According to Fidelity Investments, the number of 401(k) millionaires has shot up by 43% from a year ago, now totaling 485,000 accounts. These millionaires make up only 2% of Fidelity's 24 million defined contribution plan accounts.

But these success stories didn’t happen overnight—they were an average of 26 years in the making, with consistent contributions of about 17%.

Interestingly, Americans now believe they need $1.46 million to retire comfortably, up significantly from $1.27 million last year.

In that case, even a newly minted 401(k) millionaire may still be a few years away from their ideal retirement. More specifically, they are:

• 9.5 years away at a 4% real (inflation-adjusted) return

• 7.5 years at a 5% real return

• 6.5 years at a 6% real return

So, what's the takeaway?

The path to a comfortable retirement is simple but requires patience.

Regular contributions and the magic of compounding over time can turn modest savings into a multi-million dollar nest egg. Just be prepared for the journey to take 30 to 35 years with average income and savings rates.

That’s all for today! For more insights, follow me on Instagram, Twitter, and at TheMoneyManiac.com.

Also, I’d love to hear your feedback. So please reply with comments – I read everything.

Until next time,
Daniel

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.