Date: 08/14/2023
Author: Mr. X
I still think we will bring home one last triple-digit gain.
Nvidia (NVDA) is one of the most important companies in the world today. The literal inventors of the GPU, they are also one of the most important pillars of the AI revolution. They’ve stolen a major lead on competitor AMD, and are so important to this developing tech sector that they constitute an important national asset in and of themselves.
Though the tech sector suffered some setbacks last week, Nvidia was up more than 7% yesterday, surging to over $437 a share. Morgan Stanley argued that the stock is still a “top pick.”
“We think the recent selloff is a good entry point, as despite supply constraints, we still expect a meaningful beat and raise quarter — and, more importantly, strong visibility over the next 3-4 quarters,” said analysts from the company. “Nvidia remains our Top Pick, with a backdrop of the massive shift in spending towards AI, and a fairly exceptional supply demand imbalance that should persist for the next several quarters.”
It is now one of the most valuable companies in the world, valued at more than one trillion, putting it in the rarefied territory of a Microsoft or an Apple.
Jim Cramer posted on X: We are finally seeing some articles about how “toxic” Nvidia is.. I like that…”
Of course, that’s probably a sign NVDA has farther to go.
Second-quarter results will be announced on August 23. The key is whether there will be revenue to the upside for the June guidance for $4 billion. The price target for Morgan Stanley is $500.
It’s important not to get too greedy. The price for the stock has approximately tripled this year and now might be a good time to take profits – if you are playing it safe.
However, if you are looking to dare a bit more, wait until August 23. Even Bank of America’s more “measured” expectation suggests that we could get a revenue upgrade when earnings are reported. That could lead to a rush into the stock – and a good time to leave while the market is hot.
That said, if you are looking for a stock for the next five years or even the next decade, you can’t do better than NVDA. It’s accomplished the also unsurpassed feat of being the founder of its field and leading the next wave of innovation. AMD doesn’t look like it can teach it anytime soon, and AI has a self-generating momentum that we likely haven’t seen before. The company that wins this is unlikely to lose anything else. NVDA is at the center of this transformation – and will be at the front of the pack for a very long time.
For those of you with the RID Legacy Portfolio, the buy in price for NVDA was $260. $520 is not that far away.
Mr. X is an investment analyst working in the Washington DC area who specializes in the intersection of business and public policy. After fifteen years working in politics, he writes on a classified basis for RogueInvesting.com to bring you news on what those with power are debating, planning, and doing
