Here I will just point out a few highlights that are less talked about by other SA authors.įirst, NVDA enjoys tremendous capital allocation flexibility, and the business is in such a strong financial position even as the demand slows recently. But overall, my overall conclusion is that long-term investors like myself can wait for a better opportunity, while swing investors can prepare for a trading window between $125 and $200 (translating into a P/E in the range of about 25x to 40x) in the next 1 or 2 years.Īs mentioned above, there are plenty of positives to be said about the stock. The remainder of this article will weigh the pros and cons more closely. And such a large volume can help to greatly improve cost absorption once the demand picks up again. It recently just reported record data center and gaming volumes. It is planning on introducing a host of new GPU, CPU, DPU, and robotics processors in the near future. Second, the business fundamentals remain strong and growth prospects robust once the contracting phase is over. First, due to the large price corrections, the valuation is much more reasonable now (around 47x P/E as to be elaborated on later). Īt the same time, such a large price correction has deflated the bubble to a large extent and there are many positives to be said about the stock. And both NVDA and AMD’s losses are far worse than the tech sector represented by QQQ. In contrast, its close peer AMD ( AMD ) “only” lost m41 YTD.
Since then, its stock prices have plunged by more than 51% YTD and by more than 57% off its recent peak. At the beginning of the year, the stock was trading in bubble territory with a P/E of almost 90x. As a deeply cyclical stock, it responded more violently to the different phases of the business cycle as you can see from the following chart. NVIDIA ( NASDAQ: NASDAQ: NVDA) is currently in an interesting spot.
0 kommentar(er)
