NVDA Stock: Is This a Plateau or a Cooldown Before the Boom?

InvestorPlace2023-11-02

Nvidia (NVDA) stock has tripled off its pandemic lows to a market capitalization of more than $1 trillion on AI growth expectations.Competitors like AMD (AMD) aren’t standing still, muddying Nvidia’s ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2380615531?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2023-11-02 16:01","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2380615531","market":"us","top_or_hot":-1,"title":"NVDA Stock: Is This a Plateau or a Cooldown Before the Boom?","media":"InvestorPlace","content":"<div>\n<p>Nvidia (NVDA) stock has tripled off its pandemic lows to a market capitalization of more than $1 trillion on AI growth expectations.Competitors like AMD (AMD) aren’t standing still, muddying Nvidia’s ...</p>\n\n<a href=\"https://investorplace.com/2023/11/nvda-stock-is-this-a-plateau-or-a-cooldown-before-the-boom/\">Source Link</a>\n\n</div>\n","source":"investorplace_stock_picks","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>NVDA Stock: Is This a Plateau or a Cooldown Before the Boom?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNVDA Stock: Is This a Plateau or a Cooldown Before the Boom?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-11-02 16:01 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://investorplace.com/2023/11/nvda-stock-is-this-a-plateau-or-a-cooldown-before-the-boom/><strong>InvestorPlace</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Nvidia (NVDA) stock has tripled off its pandemic lows to a market capitalization of more than $1 trillion on AI growth expectations.Competitors like AMD (AMD) aren’t standing still, muddying Nvidia’s ...</p>\n\n<a href=\"https://investorplace.com/2023/11/nvda-stock-is-this-a-plateau-or-a-cooldown-before-the-boom/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"NVDA","symbol_name":"英伟达","start_time":0,"source_url":"https://investorplace.com/2023/11/nvda-stock-is-this-a-plateau-or-a-cooldown-before-the-boom/","article_id":"2380615531","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2380615531","pubTimestamp":1698912119,"sourceInfo":{"source_id":"investorplace_stock_picks","name":"InvestorPlace stock picks"},"weMediaInfo":null,"summary":"NVDA stock has been one of Wall Street's most debated names. See why this trillion-dollar chip giant could stagnate or reaccelerate.","collect":0,"end_time":0,"defaultTopTitle":"investorplace.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"NVDA":"英伟达"},"translate_title":"NVDA股票：这是繁荣前的平台期还是冷却期？","themeId":"95e3e7595ac2407d82a2e646db9ba6e0","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"NVDA":1.1},"content_text":"Nvidia (NVDA) stock has tripled off its pandemic lows to a market capitalization of more than $1 trillion on AI growth expectations.Competitors like AMD (AMD) aren’t standing still, muddying Nvidia’s growth trajectory.For long-term investors, accumulating NVDA on pullbacks makes sense, but caution may be warranted over the near-term.Nvidia (NASDAQ: NVDA) has undoubtedly been one of the most debated stocks of 2023, if not the most debated one. That’s largely due to its gargantuan market capitalization exceeding $1 trillion, on sales of just over $13.5 billion in its latest reported quarter. Of course, what matters for a growth stock is not current sales but future potential. Thus, Nvidia’s future largely depends on the growth trajectory of AI and the company’s execution.What isn’t debated is the tremendous rally over the past year and a half, which has tripled Nvidia’s valuation from its trough. However, this rally hasn’t sustained itself recently, with NVDA stock trading sideways of late. Many investors now doubt the company’s upside potential given the many “ifs” around Nvidia’s valuation, and the long-term growth investors can associate with AI.NVDA Stock: The Real QuestionThe core question isn’t around Nvidia as a business, but whether AI has become a multi-trillion dollar industry this decade (beyond just conversational models to help white-collar workers). Nvidia’s fate depends on constant massive spending on its expensive AI chips from data centers and enterprises honing in on this trend.The issue is most AI companies are unprofitable financial black holes without a clear path to profitability. If the hype around AI dries up, funding would likely be squeezed for these startups, forcing them to drastically reduce spending and reuse older generations of AI chips. That would directly hurt Nvidia’s growth trajectory and margins.Moreover, competitors like Advanced Micro Devices (NASDAQ: AMD) and Intel (NASDAQ: INTC) already have very capable AI chips on the market. While AMD and Intel’s offerings may not be the absolute best yet, they can offer compelling options for AI startups and researchers looking to cut costs if they face funding crunches or economic pressures. Many experts believe AMD could catch up or even surpass Nvidia in terms of capabilities over the long-run.In the Near-Term, Nvda Looks Set to Plateau After Its Monstrous RallyPersonally, I believe NVDA stock is set to plateau in the short-to-medium term after its parabolic rally. There is simply too much speculation baked into the company’s trillion-dollar valuation to justify further near-term upside. Perhaps Nvidia will continue beating estimates and raising guidance, theoretically justifying its lofty valuation within the next few years, once clarity around AI’s growth path and the company’s total addressable market arrives.However, even in the most bullish scenarios, a $1 trillion market capitalization seems to be too high. Indeed, that’s a hefty valuation factoring in a tremendous amount of future cash flow, before we have concrete evidence and metrics around the real-world traction and quantifiable total addressable AI will have in various markets and industries.Nvidia has a proven track record of defying naysayers and bears. But prudent investors should wait for real-world confirmation of the AI hype translating into sustained revenues and market share, before chasing this high-flying stock.Competitors May Be Closing the Gap While Demand Could Slip if AI Hype FizzlesConsidering Nvidia’s steep valuation, any minor stumbles or disappointments could lead to an ugly correction. Additionally, competitors like AMD are not standing still. They aim to challenge Nvidia’s AI computing dominance over the next decade.Moreover, Nvidia’s growth depends on massive data center spending that could evaporate if the hype cycle around AI cools off before real monetizable applications are developed at scale beyond research projects. The crypto boom provided a major tailwind that boosted sales of Nvidia gaming cards over the past several years – that’s an example of a tailwind that turned into a headwind real quick.While Nvidia has real cutting-edge AI technology and capabilities, there are still open questions about whether enterprise and data center customers will continue purchasing its pricey AI chips at the same frenzied pace if economic and funding conditions tighten. Essentially, NVDA stock appears to be priced for AI perfection.My Verdict: Hold Nvda if You Already Own It, but Don’t Chase the HypeIn summary, my viewpoint is that NVDA stock seems to be overheated in the short-term, despite having promising long-term prospects. Naturally, I wouldn’t recommend selling NVDA stock at these levels, for investors who already own shares. However, I also think that aggressively building a position at more than $400 per share isn’t a good move, either. Thus, this stock’s risk/reward skews to the downside near current prices, in my opinion.Of course, if you’re a long-term investor with a 5-10-year time horizon, gradually accumulating NVDA stock on pullbacks and dips could pay off handsomely. Just brace for some turbulence on the runway before takeoff.In my view, NVDA stock is a hold here. The AI and metaverse growth story remains intact, but patience and caution are prudent, given apparent headwinds. Long-term investors can prudently buy NVDA stock for the future, but expect some gut-wrenching volatility beforehand if macro conditions deteriorate.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2380615531"}