Nvidia

21st Aug '23 by Breakout Trader

18 comments 1027 reads

Interested to know if anybody else is holding NVIDIA (NSQ:NVDA) ?

It's been on a rip this year thanks to AI, and is due to announce earnings on Wednesday.

Several brokers have upped their price targets in anticipation of strong earnings and outlook.

I have a feeling that Nvidia is moving into the same bracket as Apple, Microsoft, Alphabet, Amazon and Tesla as US market behemoths.

It doesn't get much coverage on here, but the results on Wednesday could influence where the major US indices go from here, so worth keeping an eye on.

Unlock with Email

Unlock with Google

Already have an account?
Login here

About the Author

Breakout Trader

Premium Member

18 comments

greyster

21st Aug '23

I am also holding NVIDIA (NSQ:NVDA) , it makes up 5% of SIPP. Hoping it will be a long term winner as in a great space, despite some of the hype. I also suspect it will become one of the big trillion plus businesses that the US throws up every now and then. I don't plan to trade it as fx and trading costs of US shares in SIPP are a little expensive.

Greyster

RabidDog

21st Aug '23

Great company but a lot of expectation in the price, wouldn’t take much for a significant rerating down think the PE was 50+ ! One thing I was surprised at was the uptake of the gpu within the AI domain. The GPU was all about graphics rendering optimisation and not specifically designed for computational acceleration in AI. Suspect that will change with more specific processors. Now it may be that Nvidia champion this but it’s one of the many scenarios where this could go wrong.

Rusty2

21st Aug '23

I sold out too early around $380, looking to buy back in but price is a bit too high, for me.

john2

21st Aug '23

I believe the reason the chips are used for AI is because they enable a lot of parallel threads to run simultaneously.

Condor

21st Aug '23

Looking forward to results on Wednesday. I first purchased and held 3 years ago and expanded holding last May, I believe shares are up around 210% this year. Obviously very hot but as the main engine driver for Ai, I believe more to come. Even Uk Government supposedly diving in for 5000 NVDA units, as many Governments are

I have taken some modest profits as a precaution

RabidDog

21st Aug '23

Yes they are better than standard CPU’s alone but my point is that this isn’t what GPUs were designed for. Someone will design a compute processor optimised for AI like processing. This may or may not be Nvidia.

Breakout Trader

23rd Aug '23

Nvidia smashed it - up 13% as I type.

Could this jump reverse? Maybe, but the results and outlook certainly look bullish. Will be interesting to see how the markets react tomorrow.

Momentum is getting the better of value on this one… for now.

Phado001

24th Aug '23

NVIDIA is severely overpriced. But history has taught us that stocks can remain insanely overpriced for long periods of time. Most of the time it ends in a burst of the bubble. Recently, you experienced the fall of Dutch stock market baby ADYEN: a dive of more than 50%, right now. The best example was the dot.com Bubble: even Microsoft - already very profitable at that time - made a dive from more than $52 to $19, or MINUS 63.50% !! Be prudent.

Besides the positives in the press, there are many more negatives, that need 2nd-level thinking:

1/Way Overpriced at +70 times EV/EBITDA.

2/ Very Weak FCF yield of less than 1%,

3/ Paid out 2 billion and 700 million USD in stock-based compensation, but no room for dividend? Amazing!

4/ Introducing a buyback plan of 25 BIL USD: It should be stupid to buy back shares at these insane levels and not at all in the interest of Shareholders!

To me, it looks more like a pure good news show to pump up the price of the stock to give employees and management the opportunity to dump their positions at the very best stock prices. I have to read the last annual report of the company ... IMHO; be careful, or become a day trader.

Paul Hill

24th Aug '23

This is literally bonkers (see chart from last night's results).

Plus Nvidia’s adjusted operating margins hit 58% vs an average of 39% for the past 8 quarters.

Breakout Trader

24th Aug '23

Interesting comments from the CEO - He stated that this is just the first quarter of a period where companies are expected to invest in the hardware needed to leverage AI... whether they know what to do with it is a different matter. It seems there is a scramble to get hold of Nvidia's products, and the biggest issue will be keeping up with demand.

This is expected to last until well into next year.

It is overpriced by any standard valuation metric, but this could be one of those growth periods that market leaders go through, where the conventional valuation metrics go out the window.

The chart above is quite incredible.

Rusty2

24th Aug '23

NVIDIA (NSQ:NVDA) chart is quite impressive but there are others such as Super Micro Computer (NSQ:SMCI) that are similar and look far better value. I see NVIDIA (NSQ:NVDA) has Stockopedia Value score of 0.

Problem is when the bubble burst it will bring down the rest of the sector.

I note many other US tech. shares are soaring as well.

Breakout Trader

24th Aug '23

Perhaps, but the growth figures from Nvidia are exceptional.

Had a quick look at SMCI's numbers from the last interims, and they're nothing like this. I guess that may change going forward.

Rusty2

24th Aug '23

Yes very impressive but much is in the share price already. Looking at their figures over the last 6 years, they do seem a bit inconsistent, last results the profits were down around 55%. The shares today are down. Probably shoot up tomorrow though. Be interesting to see if the directors sell some more shares, although they did sell some large amounts back in June.

Paul Hill

25th Aug '23

After posting blowout earnings and trading 10% up after hours on Wednesday night - Nvidia closed Thursday just 0.1% higher.

Is some semblance of sanity returning wrt AI mania?

William K

25th Aug '23

Good company with enough technological edge to give it a moat. I hold NVIDIA (NSQ:NVDA) and it's been my best performer since buying in 2020. No plans to sell. Cathie Wood sold around the $200 mark earlier this year and must be regretting it bitterly. The price is a bit toppy at the moment but would be a good buy if it dips to the $300 mark IMHO. Alternatives for anyone wanting to buy into semiconductors might be Lam Research (NSQ:LRCX) (I hold) or VanEck Semiconductor UCITS ETF USD A (LON:SMGB) - both somewhat in less of a bubble at present.

Michael Dobrzanski

26th Aug '23

As someone who swing trades US equities (sorry FTSE), based on what I've heard, we're not going to see another company smash Wall Street Q2 estimates the way Nvidia did. Not for a very, very long time. Truly remarkable. I wish I had a stake. Of course take my opinion as a pinch of salt, at the moment with the Nasdaq and S&P 500 are below their 50-day lines. We've hit turbulence and waiting for a clear signal to get into new buys again. Rising yields or Fed funds rate will probably harm the tech sector, even if Nvidia isn't badly affected, that stock has a tendency to move strongly with whatever direction Nasdaq heads towards.

Breakout Trader

26th Aug '23

I also swing trade us equities, mainly through my spreadbetting account... I agree that right now is not the time to initiate new long positions.

A general indicator I use is the 10sma and 20sma... Right now the 10 is below the 20, so the market is in a downtrend. The recent uptrend was powered by a small number of big names, including nvidia, so I found it was difficult to get much traction, even on good looking setups.

Out of interest, how is your swing trading performance this year? I'm sitting on about -2.5%... Just a scrappy environment with short term rallies selling off.

Breakout Trader

30th Aug '23

Unlock the metrics for all these stocks and more...

Take a free trial

Facebook Twitter Youtube Instagram RSS

This site cannot substitute for professional investment advice or independent factual verification. To use it, you must accept our Terms of Use, Privacy and Disclaimer policies.

Unlock the metrics for all these stocks and more...

Take a free trial

Nvidia

Unlock the rest of this article with a 14 day trial

About the Author

Breakout Trader

18 comments

Unlock the metrics for all these stocks and more...

Unlock the metrics for all these stocks and more...