Caught In NVIDIA DeathTrap? Help What To Do?
I “surprised” myself when I did a quick review of my posts for this week.
Apparently, I had posted 1½ article on $NVIDIA Corp(NVDA)$ between Mon-Thu (see below):
Nvidia Price Will Gain +25%. I Won't Buy Though (click to read. give a “LIKe” - pls & tks) Inspiration came after reading its latest quarterly earnings report. Despite the A** results, I decided not to invest (now!). With valid & salient reasons as well!
Fitch Downgrades US? US Market Crash? Nvidia? (click to read, give a “LIKe”- pls & tks). Devoted half the post on the “plus+” to this semiconductor giant in trying to stike a balanced view of this stock.
Did you pay any attention to the stock yesterday?
Is there is a need to emphasize that despite being a “blue” chip stock, Nvidia was also a “deathtrap” in the process.
Before quarterly earnings was announced, its average price was about $298 range, give or take.
With a better than expected earnings (it’s not the only company reporting “excellent results - honestly); market went crazy with the bidding.
As mentioned in my original post (see above), I was not going to “chase” the stock for FOMO.
Hoped no one bought into Nvidia at prices above $380 per share. If “yes”, its immediate “paper loss” by endday. Pre-market price for Fri, 26 May is forecasted to dip by another -0.5% to $377.95.
Factors To Induce Fall From Grace?
(1) Debt Limit Crisis - Outstanding.
Until the debt limit ceiling is officially lifted with Congress signing off on an agreement, it remains a crisis that is about to overspill.
Bearing in mind that Mon, 29 May (Memorial Day) is a public holiday in US.
(2) US Inflation.
Official data for April 2023 Personal Consumption Expenditure (PCE) will be released on Fri, 26 May morning, US time.
It is “surprise” to find that May forecast is coming in “higher” than April’s actual.
Hoping that the data shows that inflation is falling; otherwise, there is no telling what might happen in June FOMC meeting.
(3) Interest Hike in June 2023?
In my morning post, “Interest Hike @Horizon, Debt Limit Crisis Eases?” (click to read, give a “LIKe” tks) I have updated the latest official data out
Like the PCE report due out later Fri morning, the Fed would be pouring over them for justifications on whether to halt interest hike for Jun or proceed with another 0.25% upwards adjustment.
The “for hike” Fed members at the last count is > “against hike” Fed members.
It is a precarious situation.
(4) Semiconductor Industry P/E Ratio.
Based on csimarket.com, the average P/E ratio for semiconductor industry for current quarter is about 32.6.
After Nvidia price surge, its current P/E stands at 218.28. It is trading at a high price-to-earnings ratio of over 100, that reflects its strong growth prospects and market leadership.
However, it also means that Nvidia is vulnerable to (a) any negative news or (b) events that could affect its earnings or outlook.
It is hoped that the above pointers will help you to navigate around Nvidia or any stocks that you are eye-ing.
These factors will have a direct knock-on effect on the US economy, policy makers decisions and ultimately filtered to affect the US market directly or in-directly.
Do you think there are other factors that may affect Nvidia’s stock price?
Do you think you will be interested to invest in a top-notch company like Nvidia?
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