Nvidia is a buy with earnings, guidance beat on deck.
Kohl’s’ shrinking revenue, weak outlook make it a stock to sell.
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The stock market ended lower on Friday after President Donald Trump made new trade threats, recommending 50% tariffs on European Union imports and considering a 25% tariff on any Apple (NASDAQ:) iPhones made outside the U.S.
Friday’s declines added to the market’s weekly losses. The declined 2.5%, the fell 2.6%, while the tech-heavy shed 2.5%. The small-cap gave up 3.5%.
Source: Investing.com
The holiday-shortened week ahead is expected to be an eventful one as investors continue to assess the outlook for the economy, inflation, interest rates and corporate earnings amid President Trump’s trade war. U.S. markets will be closed Monday for the Memorial Day holiday.
Most important on the economic calendar will be Friday’s core PCE price index, which is the Fed’s favorite inflation gauge. That will be accompanied by the minutes of the Federal Reserve’s May FOMC meeting. This could give some insight into the future path of interest rates.
Source: Investing.com
Elsewhere, in corporate earnings, Nvidia (NASDAQ:)’s results will be the key update of the week as the Q1 reporting season draws to a close. Other notable names lined up to report earnings include Salesforce (NYSE:), Dell (NYSE:), Costco (NASDAQ:), Best Buy (NYSE:), Macy’s (NYSE:), Kohl’s (NYSE:), Burlington Stores (NYSE:), and Dick’s Sporting Goods (F:).
Regardless of which direction the market goes, below I highlight one stock likely to be in demand and another which could see fresh downside. Remember though, my timeframe is just for the week ahead, Monday, May 26 – Friday, May 30.
Stock to Buy: Nvidia
Nvidia appears positioned for yet another impressive earnings report as the company continues to capitalize on the booming demand for AI infrastructure. Results for the first quarter are due after the market closes on Wednesday at 4:20PM ET. A call with CEO Jensen Huang is set for 5:00PM ET.
Market participants expect a sizable swing in NVDA shares following the print, with a possible implied move of about 7% in either direction, as per the options market.
Source: Investing.com
Analysts expect the chipmaker to report earnings of $0.73 per share for the quarter ended April 27, representing a 20% year-over-year increase. Revenue is projected to surge 66% to $43.2 billion, demonstrating the company’s continued dominance in the AI chip market.
The post-earnings call will likely focus on two critical areas that could serve as positive catalysts for the stock. First, investors will be closely monitoring Huang’s commentary regarding AI chip demand. Recent reports from cloud giants suggest AI investment remains robust, potentially supporting continued strong demand for Nvidia’s products.
Second, the market will seek clarity on production issues that have constrained supply in recent quarters. Any indication that manufacturing bottlenecks are easing could signal even stronger growth ahead as Nvidia works to fulfill its substantial order backlog.
Adding to the positive outlook, Reuters reported Saturday that Nvidia will begin production of a new, lower-level AI chip designed specifically for the China market in June. This move represents a strategic response to export restrictions imposed by the Trump administration earlier this year, which blocked the company from shipping its H20 processor to Chinese customers. The new chip could help Nvidia maintain access to the important Chinese market while complying with U.S. export controls.
Source: Investing.com
NVDA stock ended Friday’s session at $131.29, roughly 14% below its record high of $153.13 reached on January 7. At current levels, Nvidia has a market cap of $3.2 trillion, making it the second-most valuable company trading on the U.S. stock exchange – behind Microsoft (NASDAQ:). The shares are down 2% in 2025 after a 171% gain in 2024.
InvestingPro’s AI-powered quantitative model rates Nvidia with a ‘GREAT’ Financial Health Score of 3.74, painting a picture of a company firing on all cylinders, especially in profitability and growth.
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Stock to Sell: Kohl’s
Kohl’s, on the other hand, is a stock to avoid this week as it faces a challenging retail landscape. The department store chain is grappling with operational inefficiencies and weakening consumer demand, particularly for discretionary items.
The brick-and-mortar retailer, which operates over 1,100 stores across the U.S., is scheduled to release its first quarter earnings before the U.S. market opens on Thursday at 7:00AM ET. According to the options market, traders are pricing in a massive swing of 14.6% in either direction for KSS stock following the print.
Source: InvestingPro
Wall Street expects Kohl’s to post a loss of -$0.46 per share, a significant decline from last year’s loss of -$0.24 per share, with revenue projected to drop 11.5% annually to $2.99 billion.
Several fundamental issues are weighing on Kohl’s (NYSE:) performance. The company has become increasingly reliant on discounting to drive store traffic, a strategy that continues to erode profit margins in an already low-margin business. This promotional activity suggests underlying weakness in consumer demand for the retailer’s merchandise assortment.
Operational inefficiencies compound these market challenges, with the company facing inventory management issues and store productivity concerns. Unlike specialty retailers that have aggressively rationalized their store bases, Kohl’s continues to maintain a large physical footprint that may be increasingly difficult to justify given shifting shopping patterns.
Faced with a worsening economic backdrop and increasing competition from online retailers, Kohl’s lacks a clear catalyst for a turnaround.
Source: Investing.com
KSS stock –which fell to the lowest level since 1997 last month at $6.04– closed at $7.48 on Friday. Shares have plummeted 46.7% year-to-date, reflecting mounting investor concerns about Kohl’s long-term prospects as it struggles to adapt to the evolving retail landscape.
It should be noted that Kohl’s has an InvestingPro Financial Health Score of 1.96, tagged as merely ‘FAIR’, highlighting the company’s difficulty in attracting customers and driving sales.
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Disclosure: At the time of writing, I am long on the S&P 500, and the via the SPDR® S&P 500 ETF (SPY), and the Invesco QQQ Trust ETF (QQQ). I am also long on the Invesco Top QQQ ETF (QBIG), and Invesco S&P 500 Equal Weight ETF (RSP).
I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies’ financials.
The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.
