This industry leader trades at a still reasonable 14.5 times estimated 2021 earnings. JPMorgan Chase & Co. (NYSE: JPM) is one of the leading global financial services firms and one of the largest banking institutions in the United States, with about $2.6 trillion in assets. The company as it is today was formed through the merger of retail bank Chase Manhattan and investment bank J.P. Morgan.
The firm has many operating divisions, including investment and corporate banking, asset management, retail financial services, commercial banking, credit cards and financial transaction services.
Jefferies remains very positive on the money center and investment giant:
Industry titan that faces a broad recovery in nearly every aspect: 1) leading M&A advisory and capital markets product set and market share; 2) massive footprint of corporate and commercial banking customers; 3) sizable wholesale payments businesses. JPM has proven that it has the wherewithal to continually invest in people, products, and platforms to further its market share base, extending its competitive advantage vs. most peers.
JPMorgan stock investors receive a 2.49% dividend. Jefferies has set a $157 price objective. The consensus price target is $147.08, and shares closed most recently at $144.65.
This sector leader made a huge purchase last year that is proving to be a solid tailwind. Nvidia Corp. (NASDAQ: NVDA) rarely has grown through acquisitions, but it bought Mellanox and paid a whopping $6.9 billion in cash in a deal that closed back in April. In what actually was somewhat of a duel, Nvidia knocked out Intel in its bid to buy the chipmaker, and the deal has helped Nvidia boost its business of making data center chips that help power cloud computing.
Mellanox’s BlueField intelligent network adapters are another version of data center co-processing acceleration. Top Wall Street analysts see the combination of Nvidia and Mellanox as a definite threat to Intel’s data center CPU dominance of workloads.
Nvidia recently outlined a $100 billion total addressable market for its data center business by 2024, or twice the $50 billion outlined at its last investor day. The upside includes $20 billion from core Mellanox networking, $10 billion from new class of data processing units and another $10 billion from the emerging edge AI EGX computing platform.
Top analysts continue to believe the company’s exposure to some of the most exciting areas of growth in tech (gaming/esports, autonomous driving, artificial intelligence and server acceleration) will drive well above industry growth over the next few years.
Jefferies has a $680 price objective. The consensus figure is $596.59, but Nvidia stock closed at $613.21 on Tuesday.
We stayed with stocks with the biggest market capitalizations and that are among the leaders in their specific fields. Note that the stock market is very overbought and could be poised for a 5% to 10% correction. With earnings season winding down, it may make sense to buy partial positions here and see if indeed we get a pullback.
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