Eva_nana
11-20

$NVIDIA Corp(NVDA)$

Nvidia, as a growth stock, fundamentally hinges on the earnings per share (EPS) growth rate. An increase in EPS growth rate is the driving force that pulls valuation ahead of stock prices. Conversely, if the expected growth rate slows down in the future, even if it remains high growth, the valuation may also struggle to rise further and may even experience a valuation kill. After all, stock price changes ultimately equal the sum of "valuation" changes and "earnings per share" changes.

For growth stocks, the most profitable phase occurs during the Davis Double Play period, when both valuation and EPS grow significantly. Financial reports indicate that Nvidia bottomed out in January 2023 and rebounded, initiating accelerated growth in July of the same year. Looking at the stock performance over the past two years, Nvidia's recent surge is clearly supported by high EPS growth.

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