I also think the market has been itching for a reason to test the lows for at least the last week and a thesis for how this will play out is now beginning to come together. My concern is that comps are going to be difficult with pandemic demand weakening and guidance could miss due to struggling crypto markets. Even with recent underperformance the stock is still trading at an extremely high valuation with a lot of growth assumed in the price. Not really, and I say that as someone who owns it. One area to look optimistic is that AMD had a blow out quarter, which might bode well for NVDA as they are both industry leaders in their specific segments. Anything can happen in this market, and bad news could take a long time to recover. If you believe that could happen, then you're good to go! Maybe consider selling a CSP or a credit spread and waiting for after earnings to decide what to do?ĭon't forget, for NVDA to push back through $300, they have to crush earnings and also guide up with 20% growth for CY22. But right now, at $260, I think the downside risk is higher than upside. "buying more before earnings" was probably best 2 weeks ago when NVDA was at $220 for the entire week. Supply chain disruptions reducing inventory If they have any wavering due to any reason, we could see a retread back to $180. Even if they crush their earnings, they need to guide high to be able to sustain their growth levels. NVDA is trading at a P/S of 27 and a P/E of 82.
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